EDC lists P12-billion bonds in PDEx

MANILA, Philippines - Energy Development Corp. (EDC), the country’s biggest geothermal company, will list today its P12-billion fixed rate bonds at the Philippine Dealing and Exchange Corp. (PDEx).

The bonds carry a term of 5-1/2 years and seven years with fixed interest rates of 8.6418 percent per annum and 9.3327 percent per annum, respectively. With the listing, EDC makes history as the first corporation to have its maiden bond offering listed on issue date.

The bonds, offered to the public from Nov. 18 to Nov. 26, were fully taken up ahead of its closing date due to strong demand from both retail and institutional investors.

Initially, EDC applied for registration with the Securities and Exchange Commission (SEC) for an issue size of up to P10 billion.

Following the start of the offer period on Nov. 18, the joint lead underwriters — BDO Capital & Investment Corp., RCBC Capital Corp., BPI Capital Corp., and SB Capital investment Corp. — exercised on Nov. 23 the P2-billion oversubscription option.

EDC obtained the highest PRS Aaa rating for its P12-billion bonds from PhilRatings, which cited EDC’s strong cash flow generation, ample liquidity and financing sources to cover maturing debt and operating requirements, reduced exposure to foreign currency risk, improving profitability, leadership in the geothermal industry, and experienced management team as the plus factors for the highest possible corporate credit rating.

“The strong investor interest can be attributed to the PRS Aaa rating as well as to EDC’s robust financial condition resulting from increased cash flows from operations and reduced exposure to foreign currency risks,” EDC president and chief operating officer Richard Tantoco said.

“We are continuously improving our balance sheet by changing the currency mix of our debt in favor of the Philippine peso from Japanese yen, smoothening out the lumpy maturities of our debts to manage refinancing risks, and maintaining the 55:45 debt-equity ratio,” Tantoco said.

He added that proceeds from EDC’s first retail bond issue will be used to refinance outstanding loans, particularly the Miyazawa 2 loan and for other general corporate purposes.

EDC is wholly-owned by First Gen Corp. of the Lopezes. It runs the Unified Leyte plants which include the 125-megawatt Upper Mahiao, the 232-MW Malitbog, the 180-MW Mahanagdong and the 51-MW Optimization plants.

EDC owns the Bacman Geothermal Production Field (BGPF) in Sorsogon and supplies steam to the Bacman power plants, located in the towns of Bacon and Manito in Albay with total capacity of 150 MW, which are being run by the National Power Corp. (Napocor).