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AYALA Land Inc.’s (ALI) planned borrowing through the sale of
bonds has garnered the highest credit rating from Philippine Rating
Services Corp.
PhilRatings said its “PRS Aaa” rating on ALI
“is given to debt obligations with the smallest degree of
investment risk.”
In a preliminary prospectus filed with the
Securities and Exchange Commission, ALI said the bonds or IOUs due
in 2013 will be issued on a fully paid basis and priced at par.
In according the property firm a high rating,
PhilRatings cited the company’s strong sales “with substantially
all projects reporting high take-up rates.” ALI registered first
quarter gross revenues of P8.23 billion, or 28 percent higher than
in the same period last year. The company’s main business lines
reported robust sales with residential units alone accounting for
gross revenues of P3.5 billion from the bookings of 1,000 units from
50 projects. This is 17 percent higher than last year.
The company also reported strong earnings
arising from rental rate increases in its leasing business and
additional gross leasable area from shopping centers due to the
expansion at Ayala Center Cebu, Greenbelt 5 and TriNoma in Quezon
City. These projects accounted for a 30-percent increase in gross
leasable area over the 2006 figure.
PhilRatings said ALI has a “remarkable track
record of consistent profitability” despite the peaks and valleys
of the real estate industry cycle, notwithstanding “prevailing
issues and looming uncertainties.”
For this year, the property firm set aside P24.3
billion in capital expenditures, 42 percent of which is for
residential developments, 30 percent for corporate business lines,
14 percent for shopping centers and the rest for other business
lines.
Jimmy Ysmael, ALI senior vice-president and
chief finance officer, said that one of the company’s most
significant projects continues to be the development of the first
phase of Nuvali, a large-scale, fully integrated regional
development in Canlubang. At least P6 billion has been allotted to
develop phase 1 of the project. He said the first office building
including a retail strip will be operational before the year ends.
These are expected to prime development and
boost sales of the various residential projects catering to
different market segments. Of these, the high-end Abrio with 309
units is 96 percent taken up while 89 percent of Avida Settings’
431 units catering to affordable housing segment have been
committed. Treveia, which caters to urban achievers, entrepreneurs
and managers, reported a 48-percent take up to 606 units.
Land values are likewise expected to rise
further at Bonifacio Global City which is a joint venture between
ALI and the Campos Group. Construction of the Mind Museum, a 6-star
Shangri-La Hotel complex, the Philippine Stock Exchange Center and a
St. Luke’s hospital are all expected to boost the area.
In the shopping center line, Ayala Center Cebu
is expected to launch the “Greenbelt of Cebu” in the fourth
quarter. The flagship Ayala Center in Makati will launch Glorietta 5
consisting of three levels of retail and five levels of business
processing outsourcing (BPO) offices. Phase 2 of Greenbelt 5 is also
expected to open by the end of the third quarter.
Continuing demand from the domestic market
driven by increased affordability, strong remittances from overseas
Filipinos—who accounted for 23 percent of total residential sales
in the first quarter—and the rapidly expanding BPO sector— which
requires an estimated three-million square meters in office space in
the next three years—are also expected to sustain ALI’s growth.
PhilRatings said that “all these will assure
that interest payments of the proposed bonds will be “protected by
a large or exceptionally stable margin and [that] principal [will
be] secured.”
-- Katrina Mennen A. Valdez
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