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CLI bonds rated PRS Aa plus by PhilRatings

July 20, 2022

PROPERTY developer Cebu Landmasters, Inc. (CLI) said on Tuesday that its peso-denominated fixed-rate P8-billion bond issuance received an issue credit rating of PRS Aa plus with a stable outlook.

Philippine Rating Services Corp. (PhilRatings) has also upgraded the issue credit rating for CLI’s outstanding series A to C corporate notes worth P5 billion to PRS Aa plus, with a stable outlook, from PRS Aa.

The proposed bond issuance has a principal amount of up to P5 billion with a P3-billion oversubscription option. This is the initial tranche of the company’s shelf-registered P15-billion debt securities program to be utilized within three years.

CLI said it is planning to use the profit from the issuance to support its growth plans, primarily for market investments and land banking activities.

A credit rating of PRS Aa means that the issuance is of high quality and is subject to very low credit risk. It also indicates that CLI’s capacity to meet its financial commitment is very strong. It may also include a plus or a minus to further qualify its ratings.

A stable outlook means CLI’s rating of PRS Aa is likely to be maintained or to remain unchanged in the next 12 months.

PhilRatings’ outlook and rating reflect an obligor’s sound management and strategy, improved profitability, adequate coverage of interest even with a higher debt position and threats from a highly competitive market, and a substantial land bank — counterbalanced by the company’s ability to form strategic joint venture partnerships.

The firm said that the ratings were based on available information and projections at the time that the rating review was performed and might change should circumstances warrant a change.

CLI is a Cebu-based company engaged in the development, sale, leasing, and management of real estate. Its portfolio includes residential condominium units, subdivision houses and lots, townhouses, hotels, office projects, retail spaces, and townships.

As of March 31, CLI had completed 36 projects, which were a mix of residential, office, hotel, retail, and mixed-use. It also has 55 ongoing projects, with a combined total of 19,833 units, situated in strategic locations in Visayas and Mindanao.

CLI has a pipeline of 21 projects for the next two years, including 19 residential, one office condo, and the beginning of lot sales in Davao Global Township.

At the stock exchange on Tuesday, CLI shares remained unchanged at P2.50 apiece. — By Justine Irish D. Tabile

Published in BusinessWorld