SEC okays P10-B Aboitiz Power bonds

MANILA, Philippines - Aboitiz Power Corp., the power generation company of the Aboitiz Group, has received the go-signal from the Securites and Exchange Commission to sell fixed-rate retail bonds worth up to P10 billion.

In a disclosure to the Philippine Stock Exchange, AboitizPower said it will issue P10 billion in bonds in principal amount of P5 billion and an oversubscription of another P5 billion.

Proceeds would be used to partially finance the company’s new power generation projects, to replenish working capital, and for other general corporate purposes, it said.

The company will issue seven-year bonds with a fixed rate interest of 5.205 percent per annum and 12-year bonds with a fixed interest rate of 6.10 percent per annum.

 “The public offer will commence today and will end at close of business day on Sept. 3, 2014,” AboitizPower said.

The bonds earlier received the highest rating from local debt watcher

Philippine Rating Services Corp. (PhilRatings), which assigned an PRS AAA issue credit rating on the issue.

According to PhilRatings, obligations rated PRS Aaa are of the highest quality with minimal credit risk, with the issuer having an “extremely strong” capacity to meet its financial commitment.

PhilRatings took into account the company’s sustained high levels of cash and cash flows in relation to debt service requirements, its conservative capital structure which may accommodate additional debt and is supported by healthy growth in retained earnings, diversified portfolio with good growth prospects and experienced management team.

At the same time, PhilRatings noted that the rating also considered that despite AbotizPower’s strong profitability in relation to debt servicing in recent years, the margins of the energy sector as a whole have been fluctuating and may continue to do so moving forward.

The power company has an attributable net sellable capacity 2,236 megawatts as of end-March 2014.

Its generation portfolio includes both renewable sources such as hydroelectric and geothermal and nonrenewable sources such as coal and oil.

AboitizPower also has interests in seven distribution utilities covering 18 cities and municipalities across Central Luzon, Visayas and Mindanao.