This will be the second tranche of green bonds that EDC will be offering, following a similar offer made in 2021. EDC successfully raised PhP 5 billion (approx. USD 89 million) from the first tranche of green bonds, which had a base issue size of only PhP 3 billion. However, the issuance was 10x oversubscribed, prompting the EDC to exercise the oversubscription option for an additional Php 2 billion.
Green bonds are fixed-rate, specific purpose bonds where proceeds will be exclusively applied to finance eligible green projects that comply with ASEAN Green Bond Standards. The initial green bond offering also marked the re-entry of EDC into the debt capital market after 2013.
According to EDC Chief Financial Officer Erwin Avante, the proceeds from the green bonds will go towards the growth projects of EDC, among others. “We have seven ongoing projects as of the moment. But for this ASEAN green bond, we still still finalize allocation which it will fund.”
Highest credit rating
In a more recent release, the Philippine Rating Services Corporation (PhilRatings) assigned the highest Issue Credit Rating of ‘Prs AAA, with a Stable Outlook’ to the proposed Green Bond issuance. This indicates an issuance with minimal credit risk and that the obligor has an extremely strong capacity to meet its financial commitment. The Stable Outlook rating means that the status is likely remain unchanged in the next 12 months.
According to PhilRatings, the high rating was granted to the strong operating cash flow of EDC, the Philippine government’s supportive policies for renewable energy, a high experienced management, and a strong parent company in the First Gen Corporation.
EDC has several growth initiatives ongoing simultaneously. The company is working on two binary geothermal power plants that extend the capacity of existing geothermal fields – one in Palayan Bayan in the Bacman field, and another one Mahanagdong in the Leyte field. EDC is also working with GreenFire Energy to pilot closed-loop geothermal technology with a grant from the US Trade and Development Agency.
