ALI’s New P2.0 Billion Bond Still Rated PRS Aaa

“Ayala Land, Inc.’s (ALI) proposed bond issue amounting to P2.0 billion is rated PRS Aaa,” PhilRatings announced as it also maintained the PRS Aaa rating for ALI’s outstanding P3.0 billion bonds, maturing in 2007 and the PRS 1 on ALI’s P1 billion in short-term commercial papers (STCPs). Both PRS Aaa and PRS 1 are the highest ratings possible in PhilRatings’ long-term and short-term rating scales. PRS Aaa is defined as: “with the smallest degree of investment risk. Interest payments are protected by a large or by an exceptionally stable margin and principal is secured. While the various protective elements are likely to change, such changes as can be visualized are unlikely to impair the fundamentally strong position of such issues.” PRS 1 likewise means that ALI has the strongest capability for timely payment of both principal and interest on its STCPs.

The ratings considered the company’s stable growth in earnings and ability to generate cash flows even in a difficult market environment. The Ayala brand name continues to dominate in the property development sector, as evidenced by its strong, recurring rental base which continues to be expanded and enhanced, as well as the good take-up of its projects in the presently more active and more attractive middle-market and mass housing segments.

ALI likewise benefits from its strong financial flexibility. Its conservative capital structure, sound debt maturity profile, as well as having the existing mechanism in place for banks to take out its receivables are all considered as positive credit rating factors.

As of June 30, 2003, ALI’s revenues amounted to P6.45 billion, representing a 23% growth year-on-year. Net income was at P1.1 billion, representing a 3% improvement.

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