EDC sets PDEx listing of oversubscribed P5-B green bonds

Published June 25, 2021, 4:05 PM

by Myrna M. Velasco

Lopez-led Energy Development Corporation (EDC) listed on Friday (June 25) with the Philippine Dealing and Exchange Corporation (PDEx) the P5.0 billion first tranche of its ASEAN green bonds.

The issue, which has been oversubscribed due to buoyed interest of investors, is part of the P15 billion ASEAN green bonds shelf registration of the energy firm.

“Due to the strong demand from investors for the first tranche bonds, the issuance was more than 10x oversubscribed, allowing EDC to exercise the oversubscription option and raise another P2.0 billion on top of the base issue size of P3.0 billion, the company-issuer said.

As previously stipulated, the first tranche bonds had been priced at the lowest end range at 2.8565-percent for the 3-year series; and 3.7305-percent for the 5-year series.

EDC President and Chief Operating Officer Richard B. Tantoco noted “through the ASEAN green bonds, the public is able to support and participate in financing renewable energy projects, which is aligned with our mission of forging collaborative pathways for a decarbonized and regenerative future.”

He narrated that this bond issuance serves as EDC’s “return to the debt capital markets,” following the last one that it did way back in 2013.

Proceeds from that capital-raising activity, according to Tantoco, “will help us fund our maintenance capital expenditure project that will allow us to continuously provide our customers with an uninterrupted supply of baseload or 24/7 power.”

Tantoco further indicated that their two ongoing expansion ventures – the Palayan binary and Mindanao geothermal projects — have been employing about 2,500 people; hence, aiding in the much-needed job generation goal of the government while the Covid-19 still rages in the country.

The company executive emphasized that the next project to be advanced to construction phase will be the Aya pumped storage facility in Northern Luzon – and the notice-to-proceed to the contractor will be issued soon.

“Even if it is a hydro project, given its ability to respond, it will be like the largest battery system that the country will have,” Tantoco vouched, adding that this will allow more wind and solar capacities into the grid.

“Unlike traditional lithium-ion battery systems that have a typical maximum discharge of three (3) hours, the Aya project can easily discharge over 8-12 hours – supporting the grid when it is needed the most,” he stressed.

For the ASEAN green bonds of EDC, BDO Capital & Investment Corporation and BPI Capital Corporation acted as joint issue managers; joint lead underwriters and bookrunners; and SB Capital Investment Corporation has been co-lead underwriter for the transaction.

 
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