FLI to raise P9 B from bond issue

Filinvest Land Inc., a property developer controlled by the Gotianun family, is planning to raise up to P9 billion from the issuance of fixed-rate bonds while interest rates remain low.

The firm is planning a P6.75 billion bond float with an Oversubscription Option of up to P2.25 billion.The issued has been assigned the highest Issue Credit Rating of PRS Aaaby Philippine Rating Services Corporation (PhilRatings).

PhilRatings also maintained the PRS Aaa Issue Credit Rating for FLI’s outstanding bonds with a total amount of P22.0 billion: P4.3 billion due in 2020, P5.3 billion due in 2021, P7.0 billion due in 2022, P2.7 billion due in 2023, P1.7 billion due in 2024, and P1.0 billion due in 2025.

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.

Each of the ratings was also assigned an Outlook of Stable which indicates that the rating is likely to remain unchanged in the next 12 months.

PhilRatings said the assigned issue credit ratings take into account FLI’s established brand name and track record, with geographically diverse real estate products and substantial land bank for future expansion.

It also noted FLI’s sound growth strategies, focused on building a balanced mix of real estate sales and recurring income; its positive cash flows and steady recurring revenue generation, amid the current pandemic crisis; and the increasing economic and market uncertainty caused by the COVID-19 pandemic.

With a share of 70.8 percent in 2019, the bulk of the Company’s total revenues continues to be generated by its real estate sales segment.

In recent years, however, FLI pursued extensive efforts and allocated significant resources to expand its recurring income business to provide for more sustainable revenue streams.

This is expected to serve the company in good stead moving forward as a more significant recurring income base provides FLI with continued receipts amidst the cycles of the industry.

By 2021, the Company targets to achieve a 50-50 income mix from its real estate business and leasing business. PhilRatings notes that such is highly achievable given that FLI’s rental business already comprised 48 percent of the total net income of the Company in 2019.

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Article and Photo originally posted by Manila Bulletin last August 28, 2020 5:00pm and written by James A. Loyola.