Filinvest set to issue P10B in bonds

Filinvest City’s central business district PHOTO FROM FILINVESTCITY.COM

MANILA, Philippines—The Gotianun family’s Filinvest Development Corp. plans to sell P10 billion in long-term bonds by January 2014, a filing to the Philippine Stock Exchange on Tuesday showed.

The bonds will have a fixed-rate and a tenor of 10 years, said the holding company with interests in real estate, banking and sugar production.

In a separate statement, the proposed offer obtained the highest credit rating of PRS Aaa, Philippine Rating Services Corp. said.

Obligations rated PRS Aaa are of the highest quality with minimal credit risk.

The obligor’s capacity to meet its financial commitment on the obligation is extremely strong, PhilRatings said.

The debt watcher said it took into consideration Filinvest’s earnings and diversified business portfolio; credit standing, financial flexibility; the businesses it operates in real estate, banking and sugar farming and milling as well as new businesses, like its foray into power generation.

“Despite  being a family-owned and controlled business,  its  operations  remain  professional  given the  presence  of non-family key  executives  in  Filinvest’s  leadership,” PhilRatings said.

The company’s subsidiaries for real estate and banking, Filinvest Land Inc. and EastWest Banking Corp. (EWB), contributed 51 percent and 39 percent of the group’s total revenues in 2012, respectively.

Filinvest Land and EWB are expected to benefit significantly from the growing economy of the Philippines, PhilRatings said.

Its investments into power were also cited, including the development  of  the  3-unit, 405 megawatt (MW) coal-fired power plant in Misamis Oriental.

In addition, its hotel and/or hospitality business is likewise expected to increase its revenue and net income contribution to the group over the medium- to long-term, with the planned expansion of the group’s portfolio going forward.

“Both revenues and net income continued to pick up likewise in the first half of 2013. In the past, [Filinvest’s ] steady earnings resulted in profitable years as  net  profit  and earnings  before  interest taxes  depreciation  and  amortization  (EBITDA) margins settled  at  an  annual  average   of  19.7 percent  and 32 percent, respectively,” the debt watcher added. Miguel R. Camus