EDC retail bonds retain top rating

MANILA, Philippines - Debt watcher Philippine Rating Services Corp. (PhilRatings) credit score for the retail bonds of Lopez-owned geothermal firm Energy Development Corp. (EDC).

EDC has issued P8.5 billion retail bonds due on June 4, 2015, P3.5 billion retail bonds due on Dec. 4, 2016, P3 billion retail bonds due on May 3, 2020 and P4-billion retail bonds due on May 3, 2023.

PhilRatings said its ratings reflect EDC’s core business which continues to generate significant revenues, with profitability expected to improve further within the next two years as well as its ample cash flows and financial flexibility to service debt obligations, particularly the P8.5-billion retail bonds due 2015.

“EDC’s market leadership, with the company having the expertise and scale to withstand competition and its well-experienced management team and knowledgeable technical personnel who have demonstrated resiliency even in the midst of calamities and disasters,” PhilRatings said.

Furthermore, the debt watcher said the rating reflected the country’s energy demand situation, as well as EDC’s new plants and international expansion, which are expected to be drivers for future growth.

PRS Aaa is the highest credit rating on the debt watcher’s long-term issue credit rating scale. 

“Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong,” PhilRatings said.

EDC is the largest producer of geothermal energy in the Philippines, with a combined geothermal capacity of 1,129.4 megawatts (MW) as of Dec. 31, 2013.

The company has four wind energy service contracts covering wind projects in Burgos, Pagudpod, Bayog, and Pagali, all in Ilocos Norte. EDC is targeting to complete the projects in the first quarter of 2015.