Conglomerate Aboitiz Equity Ventures (AEV) has returned to the local bond market for the first time this year with an offering of as much as P10 billion worth of bonds, raising new money to retire older debts and fund infrastructure projects.
The bonds will be offered in two series: four-year bonds (series E) which were priced to yield 3.2977 percent a year and, seven-year bonds (series F) which carried an interest rate of 4.1018 percent a year, based on the offer supplement.
In a disclosure to the Philippine Stock Exchange, AEV said it had received the certificate of permit to offer securities from the Securities and Exchange Commission. The permit allows AEV to offer and issue the third tranche of retail bonds from its SEC-registered P30-billion peso-denominated fixed-rate retail bonds shelf registration program.
The offering started on July 26 and will run until July 30. The bonds will be issued on Aug. 9.
The base offer size is P5 billion but AEV has the option to increase it by another P5 billion.
BDO Capital & Investment Corp., BPI Capital Corp., China Bank Capital Corp., SB Capital Investment Corp., and First Metro Investment Corp. are the joint issue managers, joint bookrunners, and joint lead underwriters. These five institutions committed to raise P1 billion each for AEV.
East West Banking Corp., RCBC Capital Corp. and Union Bank of the Philippines will likewise act as selling agents.
A minimum purchase of P50,000 will be considered for acceptance. Purchases in excess of the minimum should be in multiples of P10,000.
AEV intends to list the bonds on local fixed income platform, Philippine Dealing & Exchange Corp.
The bonds earlier received the highest possible rating of “PRS Aaa” from local debt watchdog Philippine Rating Services Corp. A “PRS Aaa” rating means that the bonds are deemed to be of the highest quality with minimal credit risk and that the issuer’s capacity to meet its financial commitment on the obligation is extremely strong.
The last time that AEV drew from its bond shelf registration was in Nov. 2020 for a total amount go P7.55 billion.
Proceeds from this latest offer will be used to pay for the early redemption of AEV’s existing seven-year series B bonds worth P8.47 billion issued in 2015 prior to their stated maturity in Aug. 2022.
The rest of prospective proceeds will be used to finance Aboitiz Infracapital Inc.’s 2021 equity contributions to subsidiary Apo Agua Infrastructura Inc., which will in turn invest about P750 million in its water treatment facility. Another P643.63 million will be used to finance future funding requirements of Aboitiz Infracapital in 2022, particularly for its cell site towers project.