RATING NEWS

May 22, 2015

The Pioneer Domestic Credit Rating Agency

Aboitiz Equity Ventures, Inc.s Proposed P25.0 Billion Corporate Bonds Get PRS Aaa
Rating
A credit rating of PRS Aaa was assigned to Aboitiz Equity Ventures, Inc.s (AEV)
proposed Corporate Bonds. The P25.0 billion in Corporate Bonds will be issued in 2015 with
tenors ranging from five, seven and 12 years. Obligations rated PRS Aaa are of the highest
quality with minimal credit risk. The obligors capacity to meet its financial commitment on the
obligation is extremely strong. PRS Aaa is the highest rating assigned by PhilRatings. AEVs
outstanding P8.0 in retail bonds, the most recent rating review for which was completed in
March 2015, likewise continue to maintain their PRS Aaa rating.
The rating reflects the following considerations: (1) the companys sustainable
profitability and recurring cash inflows from its subsidiaries; (2) its strong balance sheet,
characterized by a growing assets and investment portfolio, very liquid position and manageable
debt structure; (3) its ample financial flexibility; (4) the positive outlook for the Philippine
economy which is expected to benefit AEVs businesses, particularly in the short-term; and (5)
AEVs strong management team.
PhilRatings ratings are based on available information and projections at the time that
the rating review was performed. PhilRatings shall continuously monitor developments relating
to AEV and may change the rating at any time, should circumstances warrant a change.
AEV remains as one of the largest conglomerates in the Philippines, with investments in
the power, banking, food manufacturing and property development sectors. Its main core
business, Aboitiz Power Corporation (AP), is a leading power generation and distribution
company in the Philippines. As of December 31, 2014, AP had a total attributable capacity of
2,250 megawatts (MW). It will continue to increase its generation capacity from both renewable
and non-renewable sources of energy.
The companys profitability continues to be strong, with a net income of P5.38 billion
and a net profit margin of 20% during the first quarter 2015. Its earnings before interest, taxes,

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depreciation and amortization margin remained flat, though still at a comfortable 35%, compared
to its year-end 2014 EBITDA margin.
The company likewise maintained a very liquid position, with a current ratio of 2.2x
and a high cash balance of P55.82 billion as of end-March 2015. Operating cash flows were
strong at P11.59 billion, ample for servicing its current debt going forward.
AEV maintains a sound capital structure, with total debt-to-total assets and total debt-tototal capitalization of 41.0% and 47.0%, respectively as of end-March 2015. The companys
debt-to-equity ratio was maintained at a prudent level of 0.9x, providing the group with financial
flexibility as it embarks on its growth and acquisition strategies.
AEVs businesses are seen to benefit from the continuing positive outlook of the
Philippine economy, particularly in the short term. The company is expected to seize
opportunities for expansion to further enhance the market position of its subsidiaries and
associates. AEV has also shown great interest in expanding its businesses through its
participation in the governments Public Private Partnership (PPP) projects.

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