EDC raises $300M in bond offer

By Amy R. Remo Philippine Daily Inquirer First Posted 04:41:00 01/22/2011 Filed Under: bonds and t-bills, Energy & Resources MANILA, Philippines—Geothermal leader Energy Development Corp. has successfully raised $300 million from a dollar denominated bond offering, said to be the first Philippine corporate bond issued this year. In a disclosure to the Philippine Stock Exchange, EDC said it already received the proceeds from the issued bonds, which would fall due on 2021. It added that it priced its notes last Jan. 13 at the “tighter end of an earlier price guidance of 6.5 percent.” EDC’s offer came in the wake of the country’s successful global peso note issuance. According to the Lopez-led firm, the debt notes will be listed on the Singapore Exchange Securities Trading Ltd. Deutsche Bank and J.P. Morgan acted as joint lead managers for the transaction. “The positive reception by investors is a clear indication of their confidence in EDC’s ability to reinforce its position in the Philippine renewable energy market and its potential to expand and maintain its position as a leader in the geothermal energy industry. It is also a recognition of our strong track record and continuing efforts to manage risks as EDC executes on its growth platforms,” said EDC president and COO Richard B. Tantoco. Tantoco further noted that the proceeds from the notes would be used to fund EDC’s projects, capital expenditures, debt servicing requirements and other general corporate purposes. Currently, the country’s largest producer of geothermal energy is focusing its efforts and resources on domestic growth as well as overseas expansion, particularly in Asia and Latin America. Over the next five years, EDC plans to put up greenfield power plants all over the country, investing $1 billion in the process. This move will help propel EDC to become the top geothermal company in the world. In particular, EDC targets to put up geothermal facilities that will generate a combined 230 megawatts (MW) within existing concession areas, as well as a wind farm in Burgos, Ilocos Norte. Among the greenfield, expansion and rehabilitation projects expected to be completed by 2015 are the 150-MW Bacman geothermal plant and the 86-MW wind farm in Burgos, Ilocos Norte (2012); the 40-MW Tanawon and 20-MW Nasulo geothermal projects (2013); 50-MW Mindanao 3 geothermal project (2014); and the 40-MW Rangas geothermal project and 40-MW Kayabon project (2015). Overall, the company hopes to increase its attributable generating capacity by 38 percent to 1,542 MW, from the current 1,116 MW, within a five-year period starting this year, Tantoco said. Also, EDC said it would continue reducing its exposure to third foreign currency exchange risks through the redenomination of its yen-denominated debt to peso and dollars.