The rates of Aboitiz Power’s 3 billion pesos has been set for its offer of three-year and five-year fixed rate bonds. The three-year bonds would carry an 8.0 percent coupon and the five-year bonds an 8.7 percent coupon, or a premium of slightly over 220 basis points against best bids for comparative local Treasuries. The minimum investment is 50 thousand with increments of 10 thousand for additional invesments.
Aboitiz Power will use the offer proceeds to partly finance its acquisition of the Tiwi-Makban geothermal power plant from state-run National Power Corp.
The company has picked BDO Capital & Investment Corp, BPI Capital Corporation, First Metro Investment Corp and ING Bank Manila branch as joint lead managers.
It is good to see that local companies have been tapping local investors for their bond offerings. After Globe and San Miguel, Aboitiz is the latest addition of blue chip companies who is confident that they can source investment requirements domestically. It is also surprising to see these bonds offer minimum invesment of 50 thousand, where an average office employee can put his savings. These bond offerings are selling like hotcakes, and it only shows there is enough liquidity in the Philippine market despite the global economic turmoil. I think it is time for government to issue retail treasury bonds/bills again to source its pump priming activities.
