AboitizPower's P12 B bonds get top credit rating

Published October 1, 2021, 6:07 PM

by James A. Loyola

Aboitiz Power Corporation’s proposed P12-billion bond issuance has been assigned the highest Issue Credit Rating of PRS Aaa, with a Stable Outlook by Philippine Rating Services Corporation (PhilRatings).

The AboitizPower bonds have a base issue size of up to P6.0 billion, with an oversubscription option of up to P6.0 billion.

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PhilRatings has also maintained its Issue Credit Rating of PRS Aaa, with a Stable Outlook, for AboitizPower’s outstanding bonds amounting to P38.0 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, a Stable Outlook means “The rating is likely to be maintained or to remain unchanged in the next 12 months.”

PhilRatings said key rating factors in the assignment of the rating include AboitizPower’s diversified portfolio with good growth prospects, experienced management team, improved financial performance in the first half of 2021, and healthy cash flows and adequate liquidity.

Aboitiz Power Logo

It also considered that the power industry is seen to be relatively more stable amidst increasing economic uncertainty caused by the COVID-19 pandemic, given that electricity is an essential need.

PhilRatigns said “AboitizPower is on track to recovery as of the first half of 2021, following the decline in its profitability in 2020 given the impact of the COVID-19 pandemic.” Net income posted a hike of 129 percent, from P4.8 billion in the first half of 2020 to P10.9 billion in the first semester of 2021, and net profit margin jumped to 18 percent.

Moving forward, AboitizPower projects spending around P190.0 billion for an additional 3,700 MW of renewable energy by 2030.

The Company aims to expand its total attributable and net sellable capacity to 9,200 MW in the next 10 years, half of which will come from various renewable energy sources.

The Company has already identified 2,364 MW of new renewable energy projects, all in varying stages of development and located primarily in Luzon. Such is composed of solar, wind, and hydro.

PhilRatings notes that AboitizPower plans to have a higher investment in solar power as it is reportedly the most competitive renewable asset in the renewables market.

 
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