EDC seeks nod for green bond offer

By Jordeene B. Lagare March 18, 2021
https://www.manilatimes.net/2021/03/18/business/companies/edc-seeks-nod-for-green-bond-offer/852834/

The Energy Development Corp. (EDC) announced on Wednesday its plan to issue fixed-rate green bonds worth up to P15 billion.

In a prelimary prospectus, the Lopez-led renewable energy (RE) company said it would issue these under its Asean Green Bond program.

Asean stands for the Association of Southeast Asian Nations, of which the Philippines is one of 10 members. The acronym has occasionally been used to refer to the actual region.
The EDC seeks the Securities and Exchange Commission’s (SEC) approval of these bonds, to be issued in one or more tranches within three years.

Proceeds from the issuance will be used to finance or refinance new and existing RE projects that are regarded as eligible green projects under the EDC Green Bond Framework.

The firm drafted this framework in accordance with the four core components of the International Capital Market Association’s 2018 Green Bond Principles.

These principles offer guidelines on the eligible projects that can be financed with green bonds, procedures in selecting and evaluating these projects, management of the proceeds from the bonds, and subsequent reporting.

The EDC also filed with the SEC an application to issue an initial tranche of green bonds worth up to P3 billion with an oversubscription option of up to P2 billion.

If cleared, the bonds will be offered from May 10 to 14 and listed on the Philippine Dealing & Exchange Corp. (PDEx).

BDO Capital & Investment Corp. and BPI Capital Corp. will be the joint issue managers, lead underwriters and bookrunners, with SB Capital Investment Corp. as co-lead underwriter.

The Philippine Rating Services Corp. (PhilRatings) bestowed the highest issue credit rating of “PRS Aaa,” with a stable outlook, on the planned issuance.

“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 explained.

A stable outlook, on the other hand, means that the assigned issue credit rating is likely to remain unchanged in the next 12 months.

Proceeds from the first tranche of the bonds shall be used to partially reimburse the equity contributed by EDC into subsidiary Bac-Man Geothermal Inc. in the fourth quarter of 2020 and the first quarter of 2021 to fund the spending requirements of the Palayan Bayan Binary Project, among others.