EDC gets triple-A rating for P10.5-B retail bonds

by James Loyola January 10, 2016
http://www.mb.com.ph/edc-gets-triple-a-rating-for-p10-5-b-retail-bonds/

Energy Development Corporation (EDC) has retained the highest Issue Credit Rating of PRS Aaa from Philippine Rating Services Corporation (PhilRatings) for its P10.5 billion worth of retail bonds.

The outstanding retail bonds consist of: P3.5-billion Retail Bonds due on December 4, 2016; P3.0-billion Retail Bonds due on May 3, 2020; and P4.0-billion Retail Bonds due on May 3, 2023.

Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong.

PhilRatings said EDC’s rating reflects the firm’s ample cash flows and its position as the leading vertically-integrated geothermal power producer in the country, with its enhanced standing likewise as the world leader in terms of geothermal power plant capacity.

The rating also factors in EDC’s growing portfolio of renewable energy projects, as well as its international expansion efforts that are expected to spark revenue growth and its strong revenue generation and sustained profitability.

PhilRatings also considered EDC’s financial flexibility and manageable debt profile, thereby mitigating various operational and financial risks, and its proactive stance in addressing emerging trends in the local power industry.

Accounting for 60.9 percent of the country’s 1,918 megawatt (MW) installed geothermal capacity in 2014, EDC is the leading producer of geothermal power in the country, with total geothermal capacity of 1,169 MW in installed capacity.

To sustain and further enhance its growth prospects, EDC is venturing into other indigenous renewable energy projects involving hydropower, wind and solar energy.

In 2008, EDC ventured into hydroelectric power generation after acquiring a 60 percent equity in the 132 MW Pantabangan-Masiway Hydroelectric Power Plants (PMHEPP).

During the last quarter of 2014, EDC also commenced the commercial operation of the 150 MW Burgos Wind Energy Project (BWEP), the largest wind farm in the country.

Likewise, the 4.1 MW Burgos Solar Energy Project (BSEP) completed its first phase and commenced commercial operations in March, 2015.

As a result, EDC’s total installed generating capacity, inclusive of PMHEPP, BWEP and BSEP, stood at 1,455 MW, accounting for 24.7 percent of the country’s 5,898 MW installed renewable energy capacity as of end-2014.

EDC is also in various stages of developing additional growth areas for local renewable energy projects which are expected to add to the company’s portfolio in the coming years.

With the Feed-in Tariff scheme already in effect, EDC expects to develop additional wind and solar projects in the next three to five years, subject to the projects’ feasibility based on the next rounds of FiT rates and installation targets.