EDC gets approval to offer green bonds
LOPEZ LED Energy Development Corp. (EDC) has secured the green light to proceed with its planned issuance of up to P10 billion in Asean Green Bonds.
First Gen Corp., the parent firm of EDC, said Monday the Securities and Exchange Commission (SEC) has issued a certificate of permit to offer securities for sale authorizing EDC’S second tranche of the fixed rate Asean green bonds which consists of 3-year bonds due in 2027, 5-year bonds due in 2029, and 7-year bonds due in 2031 for a total of P6 billion, with an oversubscription option of up to P4 billion.
The proceeds are earmarked for EDC’S power projects.
The second tranche is part of the shelf registration of EDC’S fixed rate Asean green bonds totaling P15 billion.
Earlier, the Philippine Rating Services Corp. (Philratings) has assigned the highest Issue Credit Rating of PRS Aaa, with a Stable Outlook, to EDC’S proposed green bonds.
Philratings has likewise maintained the Issue Credit Rating of PRS Aaa, with a Stable Outlook, for EDC’S outstanding P5 billion Fixedrate ASEAN Green Bonds issued in June 2021.
EDC’S installed capacity has reached 1,463 megawatts. This is roughly one-fifth of the country’s installed capacity from renewable sources.
Geothermal power plants comprise 80 percent of EDC’S portfolio. The company has a total installed capacity of 1,169 MW from geothermal, accounting for 60 percent of the country’s installed geothermal capacity.
Parent firm Fgen, meanwhile, has 3,668MW of installed capacity in its portfolio , which accounts for 20 percent of the country’s gross power generation.
The green bonds are priced at the lowest end of the range of 6.7478 percent, 6.8873 percent and 7.0626 percent for the 3-year, 5-year and 7-year series, respectively.
The offer period is set on May 13 to 17, 2024.
BDO Capital & Investment Corp. and BPI Capital Corp. have been mandated to act as joint issue managers.
EDC President Jerome Cainglet said the green bonds will partially fund the company’s geothermal and battery expansion projects.
“This second tranche Asean green bonds will support the growth and resiliency of our renewable energy portfolio as we serve the growing economy’s increasing energy needs while pursuing the country’s decarbonization and net zero journey.
This will be part of the P60-billion capital investment program that EDC is undertaking for its drilling operations program over the next three years and its renewable energy growth initiatives,” added Cainglet.