EDC issues and lists bonds for US$ 257m on December 4, 2009

Alexander Richter 3 Dec 2009

Energy Development Corp. (EDC) issues and lists its P12-billion (US$ 257 million) fixed-rate bonds on December 4, 2009 at the Philippine Dealing and Exchange Corp. (PDEx).

According to recent news from the Philippines, “Energy Development Corp. (EDC) said its P12-billion fixed-rate bonds will be issued and listed today, Friday, at the Philippine Dealing and Exchange Corp. (PDEx).

In a statement, EDC said the bonds will be issued with a term of five-and-a-half years and seven years with fixed interest rates of 8.6418 percent a year and 9.3327 percent a year, respectively.

With the listing, EDC said it makes history as the first corporation to have its maiden bond offering listed on issue date.

EDC added that the bonds offered to the public from November 18 to 26 were fully taken up ahead of its closing date due to strong demand from both retail and institutional investors.

Initially, EDC applied for registration with the Securities and Exchange Commission (SEC) for issuance of up to P10 billion.

Following the start of the offer period on November 18, the joint lead underwriters, namely, BDO Capital and Investment Corp., RCBC Capital Corp., BPI Capital Corp. and SB Capital Investment Corp., exercised on November 23, the P2-billion oversubscription option.

EDC said it obtained a PRS “Aaa” rating for its P12-billion bonds.

PhilRatings cited EDC’s strong cash-flow generation; ample liquidity and financing sources to cover maturing debt and operating requirements; reduced exposure to foreign-currency risk; improving profitability; leadership in the geothermal industry; and experienced management team as the plus factors for its getting the highest possible corporate credit rating.

“The strong investor interest can be attributed to the PRS ‘Aaa’ rating as well as to EDC’s robust financial condition resulting from increased cash flows from operations and reduced exposure to foreign-currency risks,” Richard Tantoco, EDC president and chief operating officer, said.

He added that EDC management is continuously improving the balance sheet by changing the currency mix of debt in favor of the Philippine peso from Japanese yen, smoothening out the lumpy maturities of debts to manage refinancing risks, and maintaining the 55:45 debt-equity ratio.

“Proceeds from EDC’s first retail bond issue will be used to refinance outstanding loans, particularly the Miyazawa 2 loan, and for other general corporate purposes,” said Tantoco.”

Source: Philippines Business Mirror