SEC okays EDC's P12-billion fixed-rate bond offer

MANILA, Philippines - Energy Development Corp. (EDC), the country’s largest geothermal energy producer, secured the Securities and Exchange Commission’s approval to issue up to P12 billion worth of fixed-rate bonds.

EDC originally applied for the registration of P6 billion worth of bonds with an oversubscription option of an additional P4 billion. It, however, raised the issue size to a maximum P12 billion last week on strong investor demand.

The bonds will carry a maturity of five and seven years and will be due on June 4, 2015 and Dec. 4, 2016, respectively.

Net proceeds from the bond issue, amounting to P11.88 billion, will be used to partially refinance the outstanding foreign-currency denominated Miyazawa II loan with an outstanding balance of ¥22 billion and for general corporate purposes.

EDC also intends to use proceeds for short-term liquid investments including but not limited to short-term government securities, bank deposits and money market placements which are expected to earn prevailing market rates.

The Miyazawa loan bear interests at 2.37 percent per annum, payable semi-annually in arrears on June 26 and Dec. 26, 2010.

EDC first tapped the local debt market in June this year with the issuance of P7.5 billion worth of fixed rate bonds, attracting strong investor take-up with the issue oversubscribed by 2.5 times.

Geothermal energy produced by EDC accounts for 62 percent or 1,199 megawatts (MW) of total installed capacity in the Philippines.

Following the purchase of 60 percent of the Pantabangan-Masiway hydroelectric project, the Lopez-led company is planning to become a player in the renewable energy sector.

In June, the company took over operations of the 106- MW Mindanao power plants, a move that further boosted its power generation assets.