The Philippine Ratings Services Corp. assigned an issue credit rating of “PRS Aaa” with a stable outlook to Aboitiz Equity Ventures Inc.’s P20-billion fixed-rate peso-denominated retail bonds.
AEV increased early this month the planned retail bond issuance to P20 billion from P12 billion.
PhilRatings said obligations rated “PRS Aaa” are of the highest quality with minimal credit risk, an indication of the extremely strong capacity of the obligor to meet its financial commitment on the obligation.
A stable outlook means, “the rating is likely to be maintained or to remain unchanged in the next 12 months.”
AEV said in a disclosure to the stock exchange the rating and outlook were assigned based on the company’s experienced shareholders and management, with a strong track record; continuously growing and highly diversified asset and investment portfolio; improved profitability following the impact of the pandemic; and manageable leverage position and liquidity.
The retail bonds will be composed of a base issue size of P8 billion, with an oversubscription option of up to P12 billion.
The bonds, subject to approval by the Securities and Exchange Commission, will include P7.45-billion retail bonds from the remaining balance of the company’s P30-billion shelf registration program approved by the SEC in 2019 and P12.55-billion retail bonds from the P30-billion new shelf registration program currently being processed.
“The increase in the oversubscription option allows for greater flexibility amidst robust liquidity in the capital markets,” the company said.
The proceeds from the 2022 bonds would partially fund AEV’s equity contribution to wholly-owned subsidiary Aboitiz InfraCapital Inc. which will acquire an interest in GMR-Megawide Cebu Airport Corp. and for the repayment of certain outstanding bonds of AEV.
The bonds are expected to be offered in the fourth quarter, subject to market conditions.
AEV intends to list the bonds with the Philippine Dealing and Exchange Corp.