Energy Development Corporation (EDC) is planning to issue P3 billion worth of Green Bonds with an oversubscription option of up to P2 billion.
Philippine Rating Services Corporation (PhilRatings) said it has assigned its highest issue credit rating of PRS Aaa, with a Stable Outlook, for EDC’s proposed Green Bonds.
PhilRatings also maintained its top issue credit rating of PRS Aaa, with a Stable Outlook, for EDC’s outstanding P4.0 billion Fixed-rate Bonds due in 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.
A Stable Outlook means that the assigned issue credit rating is likely to remain unchanged in the next 12 months.
The bonds’ credit rating and outlook reflect EDC’s leading position as a pure renewable energy (RE) company, its strong parent company support and highly-experienced management team, manageable decline in net income amid the COVID-19 pandemic, sufficient liquidity, and conservative capital structure.
EDC is currently pursuing projects that will increase the capacity of its existing local power plants. The company is also currently doing pre-development work in Indonesia, Peru and Chile, with the goal of expanding its overseas footprint.
PhilRatings noted the positive developments in relation to policies that aim to increase the share of RE in the country’s energy mix.
The expected growth in demand for RE supply due to these policies is supportive of EDC’s continued growth and profitability over the long term.
EDC continued to record positive operating cash flows even amid the COVID-19 outbreak in 2020, during which net cash flows from operations slightly declined from P20.1 billion in 2019 to P18.7 billion.
Going forward, EDC expects to continue to generate healthy operating cash flows and possess sufficient liquidity, supported by the continued profitability of its operations.
“The company is seen to continue to be conservatively capitalized, providing it with ample room to manage its obligations particularly in light of the ongoing pandemic,” PhilRatings said.