The PhP12 billion Fixed Rate Bonds of geothermal leader Energy Development Corporation (EDC) was issued and listed last December 4 at the Philippine Dealing and Exchange Corp. (PDEx). The bonds have a term of 5-1/2 years and 7 years with fixed interest rates of 8.6418% per annum and 9.3327% 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 November 18 to November 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 issuance of up to PhP10 billion. Following the start of the offer period on 18 November 2009, the Joint Lead Underwriters namely, BDO Capital & Investment Corporation, RCBC Capital Corporation, BPI Capital Corporation, and SB Capital investment Corporation, exercised on 23 November 2009 the PhP2 billion oversubscription option.
EDC obtained a PRS Aaa rating for its PhP12 billion bonds. PhilRatings 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 its getting 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. We are continuously improving our balance sheet by changing the currency mix of our debt in favor of the Philippine peso from Japanese Yen and US dollar, smoothening out the lumpy maturities of our debts to manage refinancing risks, and maintaining the 55:45 debt-equity ratio,” EDC President and Chief Operating Officer Richard Tantoco explained.
Tantoco 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.
The Energy Development Corporation (EDC) is a pioneer in generating 100% clean, renewable, and reliable power as an electricity supplier in the Philippines for over 40 years. With power plants all over Visayas and Mindanao, the company is one of the biggest producers of geothermal energy in Asia and is expanding its reach in the international market, allowing it to offer customers affordable energy rates. EDC also strives to provide the best customer service it can to all its clients by having helpful salespeople and easy to understand contracts. Because of all of this, it is poised to become the premier supplier of electricity for the Philippines’ Green Energy Option Program. EDC takes its mission as a renewable energy provider seriously and goes beyond sustainability by investing in programs that enhance the environment and empower its partner communities, thereby fostering regenerative development. The company has also been working toward being carbon-neutral by improving its energy efficiency, as well as implementing various greening projects to ensure that its mission to provide future generations with a better life remains intact.