Robinsons Land's P10-billion bond issue gets highest rating

By Zinnia B. Dela Peña Updated July 23, 2009 12:00 AM

MANILA, Philippines - Philippine Rating Services Corp. (PhilRatings) has maintained its highest rating of PRS Aaa for Robinsons Land Corp.’s proposed P10-billion bond issue.

“Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The obligor’s capacity to meet its financial commitment on the obligations is extremely strong,” said PhilRatings, the sole domestic credit rating agency accredited by the Bangko Sentral ng Pilipinas.

The amount includes RLC’s initial issuance of P5 billion in July and a proposed second issuance of an additional P3 billion, with an oversubscription option of P2 billion. Proceeds from the issue will be used to fund the real estate firm’s capital expenditures.

In retaining its rating, PhilRatings reviewed RLC’s revised projections in relation to the increase in issue size. Based on its reevaluation, the business and financial profiles of RLC continue to be extremely strong, with minimal credit risk.

“While some financial ratios have slightly changed with the higher amount of the planned issue, measures of profitability, liquidity and leverage remain generally strong and sound,” PhilRatings said.

PhilRatings noted that RLC’s net and operating margins for the first half of fiscal year 2009 were higher compared with similar ratios the previous year-period as almost flat revenues were offset by lower expenses. RLC posted a net profit of P1.6 billion on revenues of P5.1 billion.

The company’s company’s initial P5- billion bond issue was more than four times oversubscribed. The bonds carried a yield of 8.5 percent per annum and a term of five years and one day.

HSBC and SB Capital Investment Corp. were the joint issue managers while BDO Capital & Investment Corp., BPI Capital Corp. HSBC and SB Capital were the joint underwriters.

RLC, a member of Gokongwei-owned conglomerate JG Summit Holdings Inc., is one of the country’s leading real estate developers in terms of revenues, number of projects and total project size.

It is engaged in the development and operation of shopping malls and hotels, the development of mixed-use properties, office and residential buildings, as well as land and residential housing developments, including socialized housing projects located in key cities and other urban areas nationwide.