ACEN [ACEN 7.3 4.0%] [link] announced that it has awarded the construction contract for its US $513-million Stubbo Solar project. ACEN said that all major contracts are now in place, and construction can now begin on the project that ACEN hopes will be commercially operational sometime in 2025.
MB Quick Take: This is a huge solar farm, so it will be interesting to see if ACEN Australia is able to keep to this relatively tight construction timeline. Solar farms are not complex to build, and two years of construction for a utility-scale solar installation is about normal, but that’s assuming smooth procurement of parts, tools, and labor. If the past couple of years have taught us anything, it’s that you can’t take any of that for granted.
Filinvest REIT [FILRT 5.5 0.9%] [link] completed the payments on P6 billion in 5-year and 6-month retail bonds that it originally issued back in 2017. The bonds matured on January 7th, and were paid by FILRT on January 9th. The bonds had carried an interest rate of 5.0496% per year.
MB Quick Take: Getting this hefty current liability off the books will open FILRT up to being able to take on additional debt that it could use to acquire more properties from the Filinvest group of companies, but it also removes the covenants that the bonds had that forced FILRT to maintain certain financial ratios, like a 2.33x cap on its debt-to-equity ratio, and a minimum debt service coverage ratio of 1.1x. I’m not saying that FILRT is now going to go hog-wild with crazy amounts of debt; just drawing attention to the change in case it matters to anyone. It doesn't matter to me: FILRT's willingness to drop its own dividend suddenly, and without explanation, is more the thing that I'd worry about as a shareholder than the potential for the firm to loosen its future borrowing caps.
--