AboitizPower’s P12-B fixed-rate bond issue secures top credit rating

September 2, 2019 | 12:05 am

https://www.bworldonline.com/aboitizpowers-p12-b-fixed-rate-bond-issue-secures-top-credit-rating/

LOCAL DEBT watcher Philippine Rating Services Corp. (PhilRatings) assigned the highest credit rating for Aboitiz Power Corp.’s (AboitizPower) fixed-rate bonds worth up to P12 billion.

In a statement, PhilRatings said it gave AboitizPower an issue credit rating of PRS Aaa, which indicates the company’s “extremely strong” capacity to meet its financial obligations.

The rating was also given a stable outlook, which means that it is unlikely to change in the next 12 months.

AboitizPower looks to sell P10 billion worth of bonds, with an over subscription of up to P2 billion. The bonds will have a tenor of seven years, maturing in 2026. This is the third tranche from its P30-billion shelf registration at the Securities and Exchange Commission.

The company expects to push through with the offering in the fourth quarter. The bonds will then be listed at the Philippine Dealing and Exchange Corp.

Proceeds from the offering will be used for repayment of short term loans and general corporate purposes. AboitizPower obtained the loan from Metropolitan Bank & Trust Co. from May 2018 to April 2019, to partially finance its acquisition of AA Thermal, Inc., according to a prospectus posted on its website.

The company engaged BDO Capital & Investment Corp. and First Metro Investment Corp. to be the offering’s joint issue managers. The two firms will work with China Bank Capital Corp., SB Capital Investment Corp., and PNB Capital & Investment Corp. to be joint lead underwriters.

At the same time, PhilRatings also maintained the PRS Aaa rating for AboitizPower’s outstanding bonds worth P23.2 billion.

The debt watcher said it took into account AboitizPower’s significant level of cash flow and financial flexibility, adequate capital structure, diversified portfolio, and its experienced management team in coming up with the ratings.

“PhilRatings’ ratings are based on available information and projections at the time that the rating review was performed. PhilRatings shall continuously monitor developments relating to AboitizPower and may change the rating at any time, should circumstances warrant a change.”

AboitizPower ended the first half of 2019 with 3,349.7 megawatts (MW) of attributable net sellable capacity. It has interests in hydroelectric, geothermal, solar, coal-fired, and oil-fired power plants.

The company targets to add 133 MW within the year, and 935 MW in 2020, in a bid to reach its target of having 4,000 MW of attributable net sellable capacity by next year.

AboitizPower’s net income attributable to the parent slipped 2% to P5.02 billion in the second quarter of 2019, on the back of a 4% decline in gross revenues to P34.86 billion.

For the first half, its attributable profit dropped 7% to P8.65 billion, while gross revenues were lower by 2% to P63.96 billion. — Arra B. Francia