EDC rolls out P12 billion fix-rate bonds to investors

CEBU, Philippines - The country’s largest geothermal energy producer, Energy Development Corporation (EDC) has introduced its offering of P12 billion fix-rate bonds to Cebuano investors.

The Cebu briefing which was held Tuesday night at the Waterfront Cebu City Hotel and Casino, was the last leg of the nationwide presentation of the P12 billion bond offering, after Manila and Davao City.

EDC officials led by its chairman and chief executive officer (CEO) Paul Aquino, were also joined by other executives from its partner institutions BDO Capital and Investments Corporation, as issue manager and bookrunner, together with underwriters, BPI Capital Corporation, RCBC, and Security Bank Capital and Investments Corporation.

In his presentation to investors, Aquino said that the proceeds of the bond issue will be used to partially refinance the outstanding foreign-currency denominated Miyazawa II loan with an outstanding balance of 22 billion Yen, as well as other corporate purposes.

The bonds will carry a maturity of five and seven years and will be due on June 4, 2015 and Dec. 4, 2016, respectively. The five-and-a half bond will yield an interest of 8.61 percent, while the 7-year investment provides 9.322 percent. Public offer period is set on November 18 to 26 (2009) and issue date on December 4, 2009.

Eleanor Lee Hilado senior vice president for BDO Capital expressed confidence the floated bond will be even over-subscribed as there is so much liquidity in the market today.

In fact, the Philippines has the record number of companies which issued bond offering this year, such as Globe Telecom, San Miguel Brewery, Aboitiz Power, Robinsons Land, and the upcoming issue of JG Summit, Filinvest Land, and Mega World.

Certainly, she said there is so much liquidity in the market today, issuing this kind of fixed instrument is timely.

The Miyazawa loan bear interests at 2.37 percent per annum, payable semi-annually in arrears on June 26 and Dec. 26, 2010.

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.

EDC a publicly-listed company is primarily engaged in the business of exploring, developing and operating geothermal energy projects in the Philippines. It is the second largest geothermal energy producer in the world according to the Proceedings World Geothermal Congress GRC Bulletin.