AMPOL LIMITED successfully priced an AUD 600 million subordinated floating bonds on 05/12/2024. It features a coupon of 3-month BBSW+2.50%, with quarterly interest payments. If the issuer does not call back after 5.25 years, the bond will continue to a floating annualized coupon rate of 3-month BBSW+2.50%. After 11/Dec/2034 (Step-Up Date), the interest rate increases to 3mBBSW + 250bps + 1% per annum.

This interest structure is designed to offer investors enhanced yield flexibility. The bond achieved significant oversubscription—AUD 1.35 billion, resulting in scale-backs to around 44%, highlighting robust market demand, with final issuance sizes capped at AUD 600 million of floating. Both bonds have a maximum maturity of 30 years, with final maturity in 2054.

Ampol Limited (ASX: ALD) is Australia’s leading independent transport fuels company with over 120 years of experience. It operates the nation’s largest petrol and convenience network, serving more than 80,000 commercial customers and over three million retail customers weekly. Ampol’s robust supply chain includes 19 terminals, five major pipelines, 89 depots, approximately 800 controlled retail sites, 2,000 branded sites, and one refinery in Lytton, Queensland. Internationally, Ampol owns Gull New Zealand, holds a 20% stake in Seaoil Philippines, and operates trading and shipping offices in Singapore and the U.S. Formerly known as Caltex Australia, Ampol completed its rebranding by the end of 2022.

Highlights from the Ampol H1 2024 report:

Ampol reported a financial performance for H1 2024, with A$18.2 billion in revenue, Ampol’s RCOP EBITDA of AUD 737 million reflects strong core profitability and operational performance. Ampol’s results are competitive, especially considering its diversification across retail and commercial sectors.

Ampol’s leverage ratio stands at 1.9x, which is lower than the industry average of 2.5x. This suggests that Ampol manages its debt conservatively, providing greater financial flexibility and better positioning to weather market fluctuations and interest rate changes. Ampol declared an interim dividend of AUD 0.60 per share, representing 61% of RCOP NPAT. This payout ratio is higher than the energy sector average of 50-55%, reflecting Ampol’s commitment to returning value to shareholders while maintaining strong reinvestment capacity to support future growth.

Ampol has previously issued rate bond with 50 years or over maturity, in comparison, this new bond has a shorter maturity for 30 years. This reduces long-term exposure for investors, which is particularly appealing for those who are concerned about holding assets for extended periods in volatile markets.