News

EDC to sell US$ 210 million retail bonds to refinance loans

Alexander Richter 26 Sep 2009

Energy Development (EDC) Corp. will sell up to P10 billion (US$ 210 million) worth of retail bonds to partially refinance its foreign currency-denominated loans.

Reported locally, “Lopez-led geothermal giant Energy Development (EDC) Corp. will sell up to P10 billion (US$ 210 million) worth of retail bonds to partially refinance its foreign currency-denominated loans.

In a disclosure, EDC said it had sought approval from the Securities and Exchange Commission (SEC) for the issuance of P6 billion (US$ 127 million) in retail bonds, with an oversubscription option of an additional P4 billion (US$ 84 million).

BDO Capital & Investment Corp. will both be the issue manager and sole bookrunner for the bond float, EDC said. The issue will be split into two tranches — one tranche with a term of five-and-a-half years and the other tranche with a term of seven years.

“The proceeds from the issuance will be used to partially refinance and/or re-denominate EDC’s outstanding foreign currency-denominated loans, and for general corporate purposes,” EDC said.

EDC sold P7.5 billion (US$ 158 million) in fixed corporate notes last June to refinance foreign debt and to finance expansion.

The company has about US$300 million in maturing obligations until next year, which includes a P1.5-billion Miyazawa loan due in June 2010.

A total of $70 million in debts of erstwhile parent Philippine National Oil Co. was passed on to EDC as a precondition to its privatization last year.

EDC’s recurring net income fell by 27.6% to P2.6 billion in the first half from P3.5 billion in the same period a year ago due to the increase in operating expenses and the maintenance of field facilities and geothermal wells.

The firm recently bagged the Palinpinon-Tongonan geothermal complex in a public auction. EDC is the country’s leading developer of geothermal energy, accounting for over 62% or 1,199 megawatts (MW) of the country’s total installed capacity prior to the Palinpinon-Tongonan purchase. Palinpinon has a capacity of 92.5 MW while Tongonan has a capacity of 112.5 MW.

EDC had said the Palinpinon-Tongonan acquisition would make it the world’s top geothermal producer, overtaking American energy firm Chevron Corp.’s yearly output of 1,273 MW.”

Source: Philippine BusinessWorld Online