AEV plans to raise up to P20 B from bond issue

Aboitiz Equity Ventures Inc., the investment arm of the Aboitiz family, is planning to raise up to P20 billion from a proposed bond issue with a base amount of up to P8 billion, with an oversubscription option of up to P12 billion.

The issuance will come from the Company’s fourth and final tranche under its existing shelf registration, as well as the initial tranche of its new three-year shelf registration program amounting to P30 billion.

Philippine Rating Services Corporation (PhilRatings) said it has assigned its highest Issue Credit Rating of PRS Aaa, with a Stable Outlook, to AEV’s proposed bond issue.

PhilRatings also maintained the Issue Credit Rating of PRS Aaa, with a Stable Outlook, for AEV’s total outstanding bonds worth P27.6 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. A Stable Outlook means the rating is likely to be maintained in the next 12 months.

PhilRatings said it considered 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.

Other factors considered include AEV’s improved profitability following the impact of the COVID-19 pandemic and its manageable leverage position and liquidity.

PhilRatings notes that the Aboitiz Family has an established track record in terms of major decisions made in relation to its business ventures and investments.

Having been in operation for over a century, the Aboitiz Group has experienced numerous economic downturns. As such, the Group is in a good position to weather the current pandemic and economic headwinds.

AEV continued to grow its investment portfolio, with core businesses that include power, food, financial services, real estate and infrastructure.

While some of its businesses were affected by the economic slowdown, its businesses proved resilient with the performance of most back to their pre-pandemic levels.

AEV does not have substantial investments in businesses that may take a longer time to recover given the pandemic such as the tourism, hospitality and transportation sectors.