Fort Bonifacio Development Corporation’s (FBDC) short-term commercial paper line, amounting to P1.0 billion, and its proposed long-term commercial papers (LTCPs), amounting to P2.0 billion, have been given ratings of PRS 3 and PRS Baa, respectively.
“In assigning the ratings, we took note of several factors,†PhilRatings stated. “There has been more specific market interest generated by FBDC for its land sales and vertical projects since the last rating review. The on-schedule completion and progress of horizontal projects and major vertical projects affirms FBDC’s ability to control development expenditures vis-à -vis available funds. The company’s conservative capital structure, moderate degree of financial flexibility, and demonstrated management capabilities were likewise taken into account.”
The positive considerations, however, are still tempered by concerns on the continued weakness of the local property market which may still limit FBDC’s near-term earnings and cash flow-generating ability.
A rating of PRS 3 “indicates satisfactory ability for payment of the debt issue on both principal and interest.” The effects of industry and market characteristics, however, may be more pronounced. A rating of PRS Baa, on the other hand, means that the issue is “neither highly protected nor poorly secured. Interest payments and principal appear adequate for the present but certain protective elements may be lacking or characteristically unreliable over any great length of time.”