Manila, Philippines, June 26, 2015 – – The Credit Rating and Investors Services Philippines Inc. (CRISP) has assigned an ‘AA+’ issuer rating on 8990 Holdings Inc as it offers P5 Billion Senior Unsecured Fixed Rate Bonds with an oversubscription amount up to P4 Billion that will be due 2020, 2022 and 2025.
CRISP’s ‘AA’ rating category reflects an issuer’s very strong capacity to repay debt obligations with adequate resources that can serve as a buffer to changes in economic conditions, industry shifts and business circumstances. The ‘+’ or a ‘plus sign’ attached to the rating indicates the issuer is on the higher end of the ‘AA’ rating scale.
The bond proceeds will be used to refinance and restructure the company’s debt into a long-term fixed rate debt.
The ‘AA+’ rating assignment is based on the following credit rating factors:
Strong Financial Performance
Solid financial performance with the last 3 years of growth in gross income growth exceeding 40% and net operating income averaging 39%.
Last year, the company exceeded the PhP3-billion profit mark to post an unaudited consolidated net income of PhP3.43 billion, which was 57% higher than the PhP2.18 billion recorded in 2013.
In 2014, the company’s gross revenue of about PhP7.90 billion was up by 48% from PhP5.36 billion the year before.
This year, the company is expecting PhP4 billion in net income based on PhP10 billion in gross revenues as it plans to launch eight new residential projects, equivalent to 14,010 units by yearend.
Strong market presence in mass housing segments in select geographical areas
The company is currently present in Davao, Cebu, Pampanga, and Cavite. Last year, 8990’s Board of Directors approved its expansion plans to establish branches in the cities of Gen. Santos, Zamboanga and Bacolod which will expand its current coverage of mass housing market in cities and provinces outside the Metro Manila area.
The company’s early success and deliberate focus on the mass housing segment are expected to provide an edge for 8990 in a highly competitive mass housing market. The company has established a cost-efficient operation that is essential in maintaining high margins in this market segment as it expands its operations in more territories.
Outlook: Stable. CRISP assigns a Stable outlook to signify its confidence that the company’s focused market strategy will continue to result:
- in sustained strong financial outcomes, and
- geographically diversified market presence.
This outlook is premised on the following macroeconomic and political trends: a stable interest rate environment, sustained robust overseas remittance trends, and calm overall political environment.