AC Energy issues $300 million green bonds

MANILA, Philippines — AC Energy and Infrastructure Corp. (ACEIC) returned to the international debt capital market with the issuance of green bonds to scale up its green energy portfolio.

ACEIC – formerly AC Energy Inc. – issued $300 million worth of senior perpetual fixed-for-life (non-deferrable) green bonds with a fixed coupon of 5.1 percent for life with no step-up and no reset, priced at par.

The bond issuance represents the first Philippine fixed-for-life perpetual bond offering since November 2019 and is the first public green bond outside the country this year.

The bonds were issued by AC Energy Finance International Limited, a wholly owned subsidiary of the company, under its $2-billion medium-term note program and are guaranteed by ACEIC.

“We are very pleased to see the high level of investor confidence in AC Energy and the strong market response to our perpetual green bond, following our maiden green bond in 2019,” AC Energy CEO and president Eric Francia said.

ACEIC said the coupon rate was 30 basis points tighter than the initial price guidance.

Meanwhile, the final order book volume exceeded $1.3 billion, or 4.33 times oversubscribed from a wide range of high quality investors.

“We are grateful to have been met with such a positive reception among bond investors especially given the pandemic. This underscores the continued confidence investors have in AC Energy’s ability to execute in this challenging environment,” AC Energy CFO Cora Dizon said.

The green bonds are listed on the Singapore Exchange Securities Trading Limited (SGX-ST) and have been certified as ASEAN Green Bonds by the Philippine Securities and Exchange Commission.

Net proceeds will be used to fund ACEIC’s ongoing tender offer for its 5.65 percent $400 million senior perpetual fixed-for-life notes callable in December 2022 until Nov. 26, and the balance for eligible green energy projects.

AC Energy’s Green Bond Framework sets out well-defined guidelines for the use of proceeds for renewable energy projects, with comprehensive monitoring and reporting commitments.

“We believe that this will power AC Energy in its pursuit to scale up renewable investments in the region as we continue the transition to a low carbon portfolio,” Francia said.

BPI Capital Corp. is the sole global coordinator for the transaction while BPI Capital Corp., Credit Suisse (Hong Kong) Limited, The Hongkong and Shanghai Banking Corp. Limited, and UBS AG Singapore Branch are the joint lead managers and joint bookrunners for the transaction.

Meanwhile,  China Bank Capital Corp., First Metro Investment Corp. and RCBC Capital Corp. are the domestic lead managers.

Last week, AC Energy changed its name to ACEIC to house listed energy platform AC Energy Philippines Inc. (ACEN), listed Manila Water Co. Inc., and unlisted unit AC Infrastructure Holdings Corp. under one roof.

Parent firm Ayala Corp. said the consolidation of its businesses under ACEIC would create a sizable and agile platform that would boost its foothold within the country’s physical infrastructure space.

The energy platform of Ayala Corp. is one of the fastest growing energy companies with over $1 billion of invested and committed equity in renewable and thermal energy in the Philippines and around the region.

The company aims to exceed five gigawatts of attributable capacity and generate at least 50 percent of energy from renewables by 2025.