EDC hikes bond offer to P12 billion due to strong investor interest

MANILA, Philippines - Energy Development Corp. (EDC), the country’s largest geothermal energy producer, is increasing the size of its planned fixed-rate bond issuance to P12 billion from an earlier size of P10 billion due to strong demand from investors.

EDC originally applied for the registration of P6 billion worth of bonds with an oversubscription option of an additional P4 billion. The bonds will be issued to the public at face value.

The bonds carry a maturity of 5 ¹/2 and seven years due on June 4, 2015 and Dec. 4, 2016, respectively.

EDC said net proceeds from the bond issue will be used to partially refinance the outstanding foreign-currency denominated Miyazawa II loan with an outstanding balance of ¥22 billion and for general corporate purposes.

EDC said it also intends to use proceeds for short-term liquid investments including but not limited to short-term government securities, bank deposits and money market placements which are expected to earn prevailing market rates.

The Miyazawa loan carries an interest of 2.37 percent per annum, payable semi-annually in arrears on June 26 and Dec. 26, 2010.

BDO Capital & Investment Corp. serves as issue manager and sole bookrunner for the issue.

EDC first tapped the local debt market in June this year with the issuance of P7.5 billion worth of fixed rate bonds, attracting strong investor take-up with the issue oversubscribed by 2.5 times.

Geothermal energy produced by EDC accounts for 62 percent or 1,199 megawatts (MW) of total installed capacity in the Philippines.

Following the purchase of 60 percent of the Pantabangan-Masiway hydroelectric project, the Lopez-led company is looking to become a player in the renewable energy sector.

In June, the company took over operations of the 106- MW Mindanao power plants, a move that further boosted its power generation assets.