Aboitiz Power Corporation is planning to raise up to P8 billion from a proposed bond issuance as the initial tranche of its new three-year Shelf Registration of up to P30 billion.
The firm is planning to offer bonds worth up to P4 billion with an oversubscription option of up to P4 billion to refinance the Company’s corporate debts and for other general corporate purposes.
Philippine Rating Services Corporation (PhilRatings) has assigned the planned bond float its highest Issue Credit Rating of PRS Aaa with a Stable Outlook.
Aboitiz Power also maintained the Issue Credit Rating of PRS Aaa and a Stable Outlook for AboitizPower’s outstanding P40 billion bonds.
Obligations rated PRS Aaaare of the highest quality with minimal credit risk. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong. A Stable Outlook means the rating is likely to be maintained in the next 12 months.
PhilRatings said the rating and outlook were assigned given the firm’s significant levels of cash flows and financial flexibility in relation to debt service requirements.
It also considered AboitizPower’s adequate capital structure, supported by the healthy increase in retained earnings; diversified portfolio, with good growth prospects; and experienced management team.
The ratings agency also noted that, given that electricity is an essential need, the power industry is seen to be relatively more stable amidst increasing economic uncertainty caused by the COVID-19 pandemic.
Aboitiz Power’s growth in 2021 will be supported by the start of commercial operations of Units 1 and 2 of GNPower Dinginin (GNPD), the operator of a 668 MW (net) supercritical coal-fired power plant located in Bataan.
In October 2020, the Energy Regulatory Commission (ERC) declared that it is no longer accepting new applications for greenfield coal power plants, in favor of more sustainable sources of power to balance the country’s energy mix.
Coal power plant projects that are already under construction or have already secured the needed permits are not affected by this new ruling.
AboitizPower would be in a good position to take advantage of this given its substantial experience in renewable energy sources such as hydropower and geothermal. It likewise is reportedly the second largest renewable energy generator in the country.