Energy Development Corp. (EDC), the country’s largest
geothermal power producer, is planning to
borrow Php5 billion from
banks next month to fund its maturing debt that forms part of the Php12 billion worth of
bonds the firm obtained three years ago.
EDC has an outstanding Php12-billion bond float, Php8.5 billion of which is due in June 2015 and the remaining Php3.5 billion is due in December 2016. The Php5-billion
loan will have a term of seven years. In 2011, EDC raised Php12-billion bonds to finance its capital expenditures,
debt servicing requirements, and general corporate purposes.
The fund that was raised through this particular issuance was partially used by the company for the rehabilitation of its existing plants in the 150-megawatt Bacon-Manito (BacMan) geothermal complex in Albay.
Local debt watcher Philippine Rating Services Corporation (PhilRatings) gave a PRS Aaa rate on the bonds. PRS Aaa is the highest credit rating on PhilRatings’
long-term credit rating scale. 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.
The bonds were specifically issued in two tranches, with Php8.5 billion due in June 2015 and Php3.5 billion due in December 2016. Just this March, Green Core Geothermal Inc., a wholly owned subsidiary of EDC, also raised nearly Php9 billion through separate
loan agreements.
Green Core particularly borrowed Php8.5 billion from Asia United Bank Corporation, Bank of the Philippine Islands, BDO Unibank Inc., Development Bank of the Philippines, Land Bank of the Philippines, Rizal Commercial Banking Corp., Robinsons Bank Corp. and Union Bank of the Philippines.
BDO Capital & Investment Corp. acted as sole arranger for the loan, which will be used to repay EDC’s other maturing bond.
Driven mainly by cash stream from its rehabilitated BacMan plant, the consolidated recurring net income of EDC during the first quarter rose by 14 percent to Php2.5 billion from the Php2.2 billion it had in the same period last year.
The Lopez firm has also noted that its revenue flows had been propped by the Php0.5 billion contribution of the BacMan generating units 1, 2 and 3.
During the first three months of the year, the company’s top line had registered Php8.5 billion in aggregate revenues, which was 20-percent higher or about Php1.4 billion heftier than last year’s Php7.1 billion in the same period.
