EDC raises US$ 156 million in a note issue, now looking at bond issue

Alexander Richter 30 Jun 2009

Reported by Reuters, “Energy Development Corp (EDC) said on Tuesday it raised 7.5 billion pesos ($156 million) in a notes issue, more than double its original plan, to refinance maturing debt and fund expansion.

EDC, a unit of the country’s largest privately held power generator First Gen Corp (FGEN.PS), is planning to bid for geothermal power assets of National Power Corp in August and has nearly $300 million in debt maturing next year, officials said.

“We really need to build up our cash pile,” Richard Tantoco, chief operating officer of EDC, told reporters after the company’s annual meeting.

Officials said the company also plans to raise another 3-5 billion pesos from a bond offer this year.

“The bonds, we’d like to do that, for so long as the market is open. The cost of funding is very cheap,” said Tantoco.

On Tuesday, EDC signed a 7.5-billion peso notes facility, with maturities of five and seven years, with a consortium of local banks led by BDO Capital & Investment Corp. It had originally planned to raise 3 billion pesos.

The company also expects to draw between $100 million and $120 million in additional loans from the International Finance Corp, the World Bank’s private-sector investment arm, possibly this year, EDC President Paul Aquino said.

Total funds to be raised from the bonds, notes and the IFC loan was likely to reach 17-18 billion pesos, Aquino said.

“That amount might be enough but we still have some other projects (to fund),” he said, adding EDC was currently in talks with other foreign banks and that a share issue was unlikely.

“The way it’s looking right now, it’s a very remote possibility that we’ll sell shares,” said Aquino, citing the higher cost involved.

With an installed capacity of 1,199 megawatts, EDC is the Philippines’ largest geothermal energy producer and has ventured into other renewable energy projects including hydropower and wind.”

Source: Reuters