Ayala-led ACEN issues guarantees for subsidiary’s $320-M loan

Ayala-led ACEN issues guarantees for subsidiary’s $320-M loan

LISTED ACEN Corp. has committed to take responsibility for the repayment of its subsidiary’s $320-million loan in the event that it is unable to fulfill its obligations, the Ayala-led energy company announced on Monday. 

“This loan obtained by ACEN Cayman [will] be used to redeem the redeemable preferred shares held by AC Energy Finance International Limited (ACEFIL) in ACEN Cayman,” the company told the stock exchange. 

Philippine National Bank and Rizal Commercial Banking Corp. are the lenders for ACEN Cayman, the energy company’s offshore investment holding firm, providing $140 million and $180 million, respectively. ACEN said it had executed guarantees on Jan. 12 in favor of the lenders.

“The proceeds will in turn be used by ACEFIL to redeem its maturing green bonds,” the listed company said.

ACEFIL is a subsidiary of AC Energy and Infrastructure Corp., which is directly owned by Ayala Group.

“As a guarantor, ACEN becomes legally obligated to repay the $320-million loan if ACEN Cayman defaults,” Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said in a Viber message. “This essentially puts ACEN’s own financial resources on the line for its subsidiary’s debt.”

“ACEN’s strong credit rating and financial standing serve as additional security for the lenders, making the loan more attractive and potentially lowering the interest rate for ACEN Cayman,” he added.

ACEN has received the highest rating, PRS Aaa, from the Philippine Rating Services Corp. for its P10-billion green bonds, it said in a July 2022 disclosure.

“It’s crucial for ACEN to closely monitor ACEN Cayman’s financial performance and ensure it stays on track to fulfill its debt obligations,” Mr. Arce said.

To date, ACEN has around 4,430 megawatts of renewable capacity spread across the Philippines, Vietnam, Indonesia, India, and Australia.

On Monday, shares of the company rose by six centavos or 1.39% to P4.39 apiece. — Sheldeen Joy Talavera