PhilRatings affirmed its PRS Aa rating on Ayala Land Inc.’s proposed P3 billion bond issue. ALI is increasing its proposed bond issue to P3 billion, from the P2 billion that was previously announced, after receiving through its issue Manager, BPI Capital Corporation, strong interest from participating underwriters. ALI’s P6 billion long-term commercial papers maturing this year also carry the PRS Aa rating.
A PRS Aa rating means that ALI has a strong capacity to meet its financial commitments on the debt issue. It also means that the issue has a small degree of investment risk, although margins of protection may not be as large as in PRS-Aaa issues. “Fluctuations of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than for PRS Aaa-rated securities.â€
The rating reflects ALI’s strong business franchise, balanced asset portfolio, conservative capital structure, and well-defined business strategy that deliver stable earnings and above-average debt coverage measures. PhilRatings cited the company’s improved operating performance and cash flow generation in 2001 that left the company with ample cash reserves which, augmented with the proceeds from a recent debt-raising exercise, largely addressed the substantial amount of debt maturing in the current year. Of the P6 billion LTCPs issued in 1997, ALI paid the P4 billion in convertible LTCPs upon maturity last March 19. The remaining P2 billion LTCPs will mature on April 23, 2002.