Ayala Corporation is planning to raise up to P10 billion from the issuance of fixed-rate bonds as the initial tranche of its planned three-year Debt Securities Program (DSP) of up to P30.0 billion.

 In a disclosure to the Philippine Stock Exchange, Ayala said it has filed its application for the P30 billion bond registration with the Securities and Exchange Commission.

Philippine Rating Services Corporation (PhilRatings) said it has assigned its highest Issue Credit Rating of PRS Aaa, with a Stable Outlook, to AC’s proposed P6.0 billion fixed-rate bonds, with an oversubscription option of up to P4.0 billion.

The bonds will have a tenor of three and five years, respectively. 

The proceeds from the proposed bond issuance will be used to partially refinance AC’s outstanding P10.0 billion fixed-rate bonds due in May 2021 and to fund the Company’s capital expenditures for its health and infrastructure businesses.

Obligations rated PRS Aaa are of the highest quality with minimal credit risk and the obligor’s capacity to meet its financial commitment on the obligation is extremely strong. A Stable Outlook means a rating is likely to be maintained in the next 12 months.

PhilRatings said it has also maintained the PRS AaaIssue Credit Rating, with a Stable Outlook, for AC’s outstanding bonds amounting to P40.0 billion: P10.0 billion due in 2021, P10.0 billion due in 2023, P10.0 billion due in 2025, and P10.0 billion due in 2027.

The assigned issue credit ratings take into account AC’s strong brand equity and leading market position for its core businesses; its experienced management team with strong track record; manageable decline in the Company’s core earnings amidst the COVID-19 pandemic; and its sound capitalization coupled with healthy cashflows and financial flexibility.

Despite the decline in its profitability last year, AC’s balance sheet remained healthy. Cash reserves amounted to P89.5 billion, well above the current debt of P69.0 billion. 

In addition to having sufficient cash, AC has a significant amount of unutilized credit lines that provide it with additional financial flexibility in servicing debt obligations, sustaining operations and funding growth opportunities as they arise. 

Source: Manila Bulletin (https://mb.com.ph/2021/03/31/ayala-corp-to-issue-p10-b-bonds-gets-top-rating/?utm_source=rss&utm_medium=rss&utm_campaign=ayala-corp-to-issue-p10-b-bonds-gets-top-rating)