The proposed bonds, which will fall due in 2019, will be redeemable (in full, not in parts) by Ayala via call options starting in the fourth year from issue date and every year thereafter until the sixth year from issue date.
Obligations rated PRS Aaa are deemed “of the highest quality with minimal credit risk” and the obligor’s capacity to meet its financial commitment on the obligations is considered “extremely strong.”
In a statement, Philratings said the rating primarily considered Ayala’s sustainable and strong recurring earnings, and the cash flows from key subsidiaries and associates; sound capitalization; multiple layers of financial flexibility; improved debt and debt service profile; value-enhancing and risk-mitigating investment management strategies; and solid brand equity and strong management team.
Philratings said Ayala’s share in the profits from its diversified portfolio of investments in key subsidiaries and associates—such as Ayala Land, Bank of the Philippine Islands, Globe Telecom and Manila Water Co.—continued to strengthen the holding company’s profitability profile.
Ayala’s consolidated revenue grew by 9.6 percent to P107.5 billion in 2011 while recurring net income rose by 16 percent year on year to P8.8 billion. For the first half of 2012, its consolidated revenue went up further by 16.4 percent to P59.6 billion year on year, while core net income improved by 35 percent to P6.3 billion.
Philratings said cash income derived from dividends paid by Ayala’s investee companies also sustained the firm’s cash position. It added that Ayala’s cash reserves remained ample at P71 billion as of end-June 2012, providing a strong liquidity level and coverage of short-term debt and interest service.—Doris C. Dumlao