AEV plans to raise P10B of bonds

Aboitiz Equity Ventures, Inc. plans to raise up to P10 billion from a proposed bond issue as part of its three-year shelf record program amounting to P30 billion.

The planned offering will have a base issue size of up to P5 billion, with an oversubscription option of up to P5 billion. AEV has so far issued P5.0 billion of the P30 billion in bonds.

Philippine Rating Services Corporation (PhilRatings) has assigned its highest issue credit rating of PRS Aaa, with a stable outlook for the planned issue. It also maintained the PRS Aaa Issuance Credit Rating, with a Stable Outlook, for the total of AEV’s outstanding bonds worth P37 billion.

Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The ability of the debtor to meet its financial commitment on the obligation is extremely strong.

PhilRatings said it assigned the rating due to AEV’s high management and shareholder experience and its good sustained revenue generation over the past few years, albeit with declining margins primarily attributable to the Company’s food business.

It also took into consideration AEV’s continuously growing portfolio of assets and investments, supported by a manageable leverage and liquidity position, and growing economic and market uncertainty caused by the COVID-19 pandemic.

“Having been in operation for a century, the Aboitiz Group has already survived numerous economic recessions. As such, the Group is in a good position to weather the current pandemic crisis, ”said PhilRatings.

However, the rating agency noted that while AEV’s assets and investments are continuously growing, the current pandemic crisis may hamper the Company’s future expansion.