ABOITIZ WILL ISSUE MORE BONDS TO RAISE CAPITAL | Marvin Germo

ABOITIZ WILL ISSUE MORE BONDS TO RAISE CAPITAL

By: Marvin Germo | June 19, 2019

In The Next 2 Years

Aboitiz Equity Ventures, Inc. (AEV) will issue bonds in the next two years once it secures its acquisition plans. This will follow the completion of its fixed-rate bonds worth P5-billion which was offered this week. According to the firm, sooner or later, it will issue another set of bond offering as they see the increase in opportunities across its subsidiaries. The plans on issuing bonds will, of course, depend on the growth and performance of the conglomerate’s businesses. Haven’t heard of the plans of AEV for the coming months or years? Let’s take a look at the major discussions related to this news.

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Full Use Of P30-Billion

As forecasted by Aboitiz, if there will be a lot of growth opportunities for the company, they will surely be required the full utilization of at least P30-billion to put their projects and plans into reality. Although they don’t have a specific plan where they will use the fund to be raised using the new set of bond offering, the firm is certain that some of its major segments will continue to grow. Their food and agribusiness unit and land segment, for example. Pilmico Foods Corporation, Aboitiz’s unit which focuses on food and agriculture, has a potential for development now that it has acquired Gold Coin Management Holdings Ltd., a Singapore-based agribusiness company.

Good Years For Infrastructure

Aboitiz is also looking forward to the performance of its Aboitiz Land as it is continuously growing together with the number of infrastructure projects they have for the next years. The firm disclosed that they are yet to announce the next tranche. P25-billion allotted for spending is to be reached for a couple of years the company has. Full shelf registration is also expected to be used. It’s not surprising that Aboitiz is looking forward to developing more real estate projects through its land subsidiary. The real estate industry is growing continuously and the demand for more office and residential units is increasing.

Benefits of Bonds

The company emphasized the good side of bonds to them. Specifically, bonds give Aboitiz a very attractive option and let them choose which fits the best for them in the coming years. This also gives them the flexibility they want to if the market opens up more opportunities for them, they are capable of raising more in line with their targeted capital. Just recently, the company raised bonds worth P5-billion composing of Series A bonds due on 2024 at 6.0157% and Series B bonds due on 2029 at 6.3210%. The raised funds from this bond offering will be used partially to refinance AEV International Pte. Ltd.’s medium-term loans.

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