AEV firms up plan for P10-B bond issuance

Published May 31, 2021, 2:47 PM

by James A. Loyola

Aboitiz Equity Ventures Inc. has firmed up its plan to raise up to P10 billion through the issuance of bonds which have been given the highest triple-A rating by Philippine Rating Services Corporation (PhilRatings).

PhilRatings said it has assigned an Issue Credit Rating of PRS Aaa, with a Stable Outlook, to AEV’sproposed bond issue of up to P5 billion, with an oversubscription option of up to P5 billion.

The issuance is part of the Company’s three-year shelf registration program amounting to P30 billion. Of the total, P12.55 billion has been issued to date.

PhilRatings also maintained the Issue Credit Rating of PRS Aaa, with a Stable Outlook, for AEV’s total outstanding bonds worth P27.89 billion.

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

On the other hand, an Outlook is an indication as to the possible a Stable Outlook means the rating is likely to be maintained or to remain unchanged in the next 12 months.

In the assignment of the rating, PhilRatings said it considered the key rating factors such as AEV’s experienced shareholders and management, with a strong track record, and its continuously growing and highly diversified asset and investment portfolio.

Also taken into account is the Company’s sustained good income generation amid the COVID-19 pandemic, albeit with decreasing margins attributed mainly to the Company’s food business.

PhilRatings also considered AEV’s manageable leverage position and sound liquidity and the prolonged economic and market uncertainty caused by the ongoing COVID-19 pandemic and African Swine Fever (ASF) outbreak.

The ratings girm said AEV been able to maintain relatively good income generation despite a reduction in the country’s economic activity brought about by the COVID-19 pandemic.

AEV was able to limit the contraction of its revenues within single digits, with total consolidated revenues declining by 7.2 percent, from P201.2 billion in 2019 to P186.7 billion in 2020.