Local credit watchdog Philippine Rating Services Corp. has issued a triple-A credit rating with a stable outlook on conglomerate Ayala Corp.’s proposed P10 billion bond issuance.
The issue credit rating of PRS Aaa is the highest credit rating assigned by PhilRatings on borrowers, suggesting that debt rated as such is of “highest quality with minimal credit risk.” The borrower’s capacity to meet its financial commitment on the obligation is deemed “extremely strong.”
On the other hand, a “stable” outlook suggests that the current rating is likely to be maintained or to remain unchanged in the next 12 months.
The bonds proposed by Ayala are part of the conglomerate’s three-year fixed rate bonds program of up to P20 billion.
PhilRatings likewise maintained its PRS Aaa rating with a stable outlook for the following outstanding retail bonds of Ayala: P10 billion retail bonds due on April 30, 2017; P10 billion retail bonds due on November 23, 2019; P10 Billion retail bonds due on May 12, 2021 and P10 billion retail bonds due on May 11, 2027.
In a statement on Thursday, Philratings said the latest credit assessment on Ayala reflected Ayala’s “strong brand equity and leading market position for its core businesses” alongside “well-defined strategy, backed by a strong management team with a solid track record.”
Philratings also cited Ayala’s sustained profitability, healthy cash flows and financial flexibility.
One of the largest conglomerates in the Philippines, Ayala operates in diverse industries that include real estate, financial services, telecommunications, water and used water services infrastructure, electronics manufacturing services, automotive dealership and distributorship, business process outsourcing, power generation, transport infrastructure, education, and healthcare.
Ayala booked P5.8 billion in net income attributable to equity holders of the parent in the first quarter of 2016, 15 percent higher year-on-year.
Philratings also noted Ayala’s significant cash hoard of P78.4 billion as well as its conservative capitalization.