Ampol share price slips amid $150 million sustainable financing initiative

A man looks frustrated with head on hand as he fills up car at service station.

A man looks frustrated with head on hand as he fills up car at service station.

The Ampol Ltd (ASX: ALD) share price is slipping in morning trade, down 1.4%.

Ampol shares closed yesterday trading for $34.44 and are currently trading for $33.96.

The S&P/ASX 200 Index (ASX: XJO) is also in the red this morning, down 0.7% as investors eye tonight’s interest rate decision by the US Federal Reserve.

Below, we look at Ampol’s latest financing round, announced before market open this morning.

$150 million sustainable financing initiative

The Ampol share price is slipping after the company reported it will raise $150 million via a fully underwritten wholesale offering of subordinated notes. With a 60-year timeline, those come due in 2082.

The first optional redemption date comes in 2028. These are not interchangeable with Ampol’s existing $500 million of subordinated notes, issued in December.

The company plans to use the capital for general corporate purposes.

The subordinated notes are linked to the company’s sustainability ambitions.

When notes are redeemed, Ampol’s repayment will be directly linked to key elements of its Future Energy and Decarbonisation Strategy. That includes its goal to cut carbon emissions from its Fuels & Infrastructure and Convenience Retail businesses by 2025. Ampol also aims to operate or control at least 500 AmpCharge or equivalent EV charge points by 2027.

Commenting on the new notes, Greg Barnes, Ampol’s chief financial officer, said:

We’re delighted to announce this new sustainability-linked hybrid issue, which we understand is the first of its kind in global markets. The transaction supports our capital management strategy and reinforces our commitment to Ampol’s Future Energy and Decarbonisation Strategy. The issue provides further funding diversification and incremental balance sheet capacity.

Ampol expects its notes to receive a 50% equity credit from Moody’s Investors Service, which will support Ampol’s credit rating.

Ampol share price snapshot

The Ampol share price has been a strong performer in 2022, up 14%. That compares to a year-to-date loss of 13% posted by the ASX 200.

Ampol shares pay a 2.6% trailing dividend yield, fully franked.

The post Ampol share price slips amid $150 million sustainable financing initiative appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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