Ampol share price slips amid $150 million sustainable financing initiative

The ASX 200 energy company will use the new capital for general purposes.

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

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Ampol share price dips on open 
  • The new $150 million in subordinated notes are linked to the company’s sustainability ambitions 
  • The notes are expected to receive a 50% equity credit from Moody's 

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.

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.

More on Energy Shares

sad looking petroleum worker standing next to oil drill
Energy Shares

What’s impacting the Santos share price today?

Oil prices have been falling amid speculations of increasing supply and sliding demand.

Read more »

Earnings Results

Beach Energy share price tumbles 9% as production slides

What did Beach Energy report?

Read more »

A woman looks in anticipation at her laptop, watching eagerly.
Energy Shares

Hoping to pounce on AGL shares? Here’s what to watch when the energy giant reports this week

AGL is gearing up to post its full-year earnings on Friday.

Read more »

a man sits on a rocket propelled office chair and flies high above a city
Energy Shares

Up 26% in a month, is the Paladin Energy share price on the comeback trail?

Will this rally stick for the ASX uranium share after a tough trading year to date?

Read more »

boy dressed as an eco warrior and holding a globe.
Energy Shares

Origin share price dips amid fresh climate pressure from shareholders

Shareholders are asking the company to put climate sensitivity analysis front and centre.

Read more »

share price ASX mining shares buy coal miner thumbs up
Energy Shares

Why are ASX coal shares having such a stellar end to the week?

It's proving a cracking end to the week for these three ASX 200 coal shares.

Read more »

share price ASX mining shares buy coal miner thumbs up
Record Highs

Why did the Whitehaven Coal share price just hit an 11-year high?

Whitehaven shares have been on fire in 2022.

Read more »

a miner wearing a hard hat smiles as he stands in front of heavy earth moving equipment on a barren mine site.
Energy Shares

Here’s why the Pure Hydrogen share price is soaring 22% today

Shares in the clean energy company are flying high on Wednesday.

Read more »