First Time Issuance Of Bonds This Year
Ayala Land, Inc. (ALI) is about to issue fixed rate bonds this year amounting to P8-billion. According to the firm, the said bond will have seven-year maturity and for the record, it will be the first time the firm will issue from its debt securities program registered with SEC which has P50-billion bonds to release. This year’s use of SEC debt securities program will be the second time for ALI since its last P50-billion bonds issued from March 2016 to October 2018. Now that the firm disclosed one of its biggest plan in 2019, what drives ALI to make this move? It is something investors should watch out for?
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Financing of Projects
The sole purpose of the issuance of P8-billion bonds is to finance ALI’s project specifically its hotels, malls and offices. The funds to be raised will be allocated to projects lined up for 2019 namely the Seda Hotel in Manila Bay, Vertis Corporate Center Tower 3 located in Quezon City, the expansion of Seda Bonifacio Global City, Taguig Integrated Terminal Exchange in Taguig City, and the Archa South. Projects in the provinces including the Bacolod Capitol Corporate Center, Ayala Malls Central Block in Cebu, and Capitol Center Mall in Bacolod will get financed by the capital raised by this bond issuance.
ALI’s Budget Allocation
With the other two bonds of ALI maturing this year, the P9.35 billion fixed rate bonds and P2.98 billion homeStart B bonds, the issuance of P8-billion bonds is a great way to start the year to fund its upcoming projects. The firm has disclosed that the funds to be collected will be added to its P130 billion capital spending which is seen 18% higher than 2018 because of the continuous growth of its office, residential, retail, and commercial developments.
Local Debt Watching
The debt rating of the bonds to be issues by ALI has a PRS Aaa rating, as according to PhilRatings. The rate signifies that the firm has a strong capacity to pay for its obligations and meet its commitments financially. The rate also indicates that the bond is stable, thus, it will remain unchanged for the next 12 months. The stability and strength of ALI to satisfy its financial commitments is due to the fact the firm has stable prospects. The economy is continuously growing, the remittance from OFWs are stabilizing, and there is an increasing demand for Business Process Outsourcing businesses. These are just some of the reasons why there is a healthy outlook for ALI.
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