EDC offers to buy $100 M of its notes for ‘debt management’

Lopez-controlled Energy Development Corporation (EDC) is offering to purchase up to $100 million of its outstanding $300 million notes that will lapse in year 2021.

The company said this will be part of its “liability management exercise” so it can improve debt profile.

“EDC has issued an invitation to holders of US$300 million 6.5percent notes due 2021 to tender notes up to an aggregate principal amount of US$100 million for purchase by EDC for cash,” the company has noted in its disclosure to the Philippine Stock Exchange.

The offer, it noted, commenced on March 27 this year until April 4, “subject to adjustment by and at the sole discretion of the EDC.”

The Lopez firm explained that “the purpose of the offer is to better manage currency risk and better optimize EDC’s debt maturity profile.”

The company emphasized that the offer also “provides an opportunity to noteholders to gain liquidity with respect to the notes – by tendering their notes for purchase by EDC – that might not otherwise be available to such noteholders.”

EDC said the notes it will be acquiring relative to the offer “will be cancelled and will not be re-issued or re-sold.”

Further, the Lopez firm noted that it “expects to announce whether it will accept valid tenders of notes pursuant to the offer” by April 5 with corresponding settlement date.

“The acceptance for purchase by EDC of the notes validly tendered under the tender offer is, among other things, conditional on the meeting of certain financing conditions by EDC,” the company stressed.

In 2011, EDC issued up to $300 million notes of which proceeds had been used to bankroll its growth projects and similarly earmarked for its capital expenditures, debt servicing requirements and other general corporate purposes.