Aboitiz holding firm plans to issue P5B in retail bonds

Conglomerate Aboitiz Equity Ventures plans to offer as much as P5 billion worth of retail bonds, the first tranche of its proposed P30-billion issuance under a shelf registration program.

The proposed offering obtained the highest credit rating of PRS Aaa with a “stable” outlook from local credit watchdog Philippine Rating Services Corp. (PhilRatings).

Obligations rated PRS Aaa are deemed “of the highest quality with minimal credit risk.” The borrower’s capacity to meet its financial commitment on the obligation is also seen as “extremely strong.”

A stable outlook means that the rating is likely to be maintained or to remain unchanged in the next 12 months.

AEV’s proposed offering has a base size of P3 billion with an oversubscription option of up to P2 billion.

In a statement, PhilRatings said it considered the following key rating factors in the assignment of the rating: “AEV’s highly experienced management team; the company’s sustainable profitability and strong liquidity, and its continuously growing asset and investment portfolio, supported by conservative leveraging.”

AEV is the publicly listed holding and management company of the Aboitiz group, with major interests in power distribution, generation and retail electric supply; financial services; food manufacturing, and infrastructure and real estate. As of end-2018, the company was 48.57-percent owned by Aboitiz & Co. Inc.

Philratings noted that AEV continued to expand its investment portfolio, with the company’s total assets posting a compounded annual growth rate (CAGR) of 9.1 percent, from P466 billion in 2016 to P554.6 billion in 2018. In the same period, several key acquisitions and projects were made by the company, particularly for its food business unit.

In 2018, Pilmico International Pte. Ltd. (Pilmico International), a wholly owned subsidiary of AEV, acquired a 75-percent equity interest in Gold Coin Management Holdings Ltd., the biggest agribusiness company in the region with 21 production facilities across nine countries. The acquisition of Gold Coin added 1.8 million metric tons of feeds capacity to the group and provided expansion opportunities for AEV in the Chinese market.

“AEV’s capital structure remained relatively conservative and well-managed since 2016, with average debt-to-capitalization and debt-to-equity ratios of 58.1 percent and 1.4x, respectively,” Philratings said.