THE Aboitiz Group may tap the debt market this year, as it plans to refinance the bridge financing it used to acquire the $1.2-billion (P60.26-billion) GNPower Mariveles Coal Plant Ltd. in Bataan last year.
Manuel Lozano, Aboitiz Equity Ventures Inc. (AEV) chief financial officer and corporate information officer, said the company may raise around $600 million (P30.13 billion), though the company has yet to finalize which of the options it will take.
“It depends. We are open to both [raising funds in the international and local market]. We can even do a local,” Lozano told reporters.
He said floating bonds is one of the options the company is looking at right now, even if interest rates have gone up. The rates are still much lower than they have been historically.
“For us right now, the good thing is the local market, even though the interest rates have gone up, if you look at 10 to 15 years tenor, it is still quite attractive so, maybe, now is a good time,” Lozano said. The company used a series of fund-raising deals to finance GN Power, including foreign bonds and a syndicated loan of between two years and three years.
Lozano said AEV tapped thebond market two years ago and AboitizPower, which takes up the bulk of the Aboitiz business, raised money from the capital market three years ago.
“But this time, probably, AboitizPower will be more appropriate [to raise funds], because they are the ones with the bigger needs. So if they run into an opportunity over the next few months, then the retail will be quite good; they could be also used for refinancing,” he said. “What is nice nowadays with the retail bonds is that you can do the shelf [registration].”
He said the company is also leaning toward the retail bonds, as it diversifies the sources of funds.
Lozano said the company is “borrowing a lot for our projects using the local banks”.
“We have to also consider single borrowers’ limit; you have to consider saturating that source of funding for us. Whether it is foreign, domestic banks, retail, we want to make sure we tap what is most appropriate. Retail will help us keep our single borrowers’ limit with the banking industry,” he said.
AEV earlier said it will spend P76.7 billion this year, an 83-percent increase from the P42 billion spent in 2015.
A bulk of this year’s budget will be used to bankroll key projects in power and infrastructure. The power unit’s capex is pegged at P59 billion for the year as it remains committed, along with its partners, to increase total capacity to 4,000 megawatts by 2020. It is setting aside P8.1 billion for infrastructure and the rest scattered through its other businesses.