AboitizPower’s PHP100 Billion Bond Program: A Golden Opportunity for Investors?

AboitizPower Corporation (AP) is making waves again as it files a registration statement with the Securities and Exchange Commission (SEC) for a peso-denominated fixed-rate retail bond program worth up to PHP100 billion under a shelf registration system which allows the issuer to sell securities in multiple offerings over a specified period of time.

AboitizPower is gearing up for a bold move with its Php100-Billion Peso-Denominated Fixed-Rate Retail Bond Program under the shelf registration system.

This major move signals a bold and strategic step for the energy giant, aiming to raise capital in tranches depending on market conditions.

The first tranche, estimated to be PHP20 billion with an oversubscription option of up to PHP10 billion, is expected to be rolled out in the second quarter of 2025, with a listing on the Philippine Dealing and Exchange Corp. (PDEx) slated for the third quarter.

Why This Matters to Investors

For local investors on the lookout for promising investment opportunities, this announcement should be on their radar. AboitizPower’s impressive growth trajectory is reflected in its latest financial results: a 13% year-on-year growth in beneficial Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), reaching PHP73.3 billion in 2024.

This surge was driven by stronger generation portfolio margins, higher energy sales, and increased capacities from new solar plants.

What makes this bond program particularly appealing to investors is that proceeds from the first tranche will be used to refinance corporate debt and for general corporate purposes.

This suggests that AboitizPower is making prudent financial decisions aimed at further strengthening its balance sheet and enhancing operational efficiency.

Additionally, the company’s favorable net-debt-to-equity ratio of 0.8x as of year-end 2024, compared to 0.9x the previous year, indicates a gradual improvement in financial stability.

Riding the Renewables Wave

AboitizPower’s strong emphasis on renewable energy also adds appeal to this investment opportunity.

Back in 2022, the company successfully raised PHP10 billion from a previous PHP30 billion shelf registration program, with proceeds primarily directed toward renewable energy projects.

This current bond offering could very well fuel further expansion in their green energy portfolio, providing a dual benefit of financial returns and contributing to the transition toward cleaner energy sources.

Cash Dividends and Market Performance

Another reason investors might be interested is the company’s recent declaration of a regular cash dividend of PHP2.35 per share, which will be paid on March 28, 2025. With a last traded price of PHP40.85 per share and a 52-week high of PHP44.50, AboitizPower’s stock continues to show resilience amid market fluctuations.

Should You Buy?

The proposed bond program, coupled with strong financial results, dividend payouts, and its dedication to renewable energy, makes AboitizPower an exciting prospect for investors seeking a steady and potentially lucrative investment.

However, as with any investment, conducting your own due diligence is essential.

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Disclaimer: This analysis represents the author's personal opinion and does not reflect the official position of The Financial District (TFD). Investors are advised to conduct their own research and seek professional advice before making any investment decisions.