EDC keeps top credit mark for P7-B bonds

Energy Development Corp. retained the highest rating on its P7-billion outstanding retail bonds.

Philippine Rating Services Corp. (PhilRatings) maintained the issue credit rating of PRS Aaa for EDC’s P3 billion bonds due on May 3, 2020 and the P4 billion bonds due on May 3, 2023.

PRS Aaa is the highest credit rating assigned by PhilRatings.

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.

In assigning the rating, PhilRatings considered EDC’s leading position as a renewable energy (RE) company, both domestically and globally; its strong parent company support and the benefits derived from group synergies, and its adequate cash flows to cover debt payments.

EDC is the largest producer of geothermal energy in the country, accounting for 61 percent of the country’s 1,916 megawatts in installed geothermal capacity.

With a combined geothermal capacity of 1,168.8 MW, EDC is recognized as a global leader in the geothermal power space.

In addition to its geothermal platform, EDC has evolved into being a dominant pure RE player, with its investments in hydro, wind and solar. EDC owns and operates the biggest joint wind (150 MW) and solar farm (6.9 MW) in the country, located in Burgos, Ilocos Norte.

First Gen Corp. remained as EDC’s largest stockholder.

EDC holds medium-to long-term offtake agreements in various forms, providing the company with stable and predictable cash flows.

Combined energy sales from bilateral contracts and the Wholesale Electricity Spot Market (WESM) reached 8,337.2 gigawatt-hours, generating P33.5 billion in revenues last year.

As of the first half, EDC recorded a three percent increase in cash from end-2016 level, primarily supported by robust operating cash flows, partially offset by net debt payments. Total cash and cash equivalents stood at P10.9 billion.

PhilRatings likewise assigned a Stable outlook to EDC’s credit rating.

An Outlook is an indication as to the possible direction of any rating change within a one year period and serves as a further refinement to the assigned credit rating for the guidance of investors, regulators, and the general public.