FIRST Gen Corp. subsidiary Energy Development Corp. (EDC) on Monday listed the second tranche of its Asean green bonds, amounting to P10 billion, at the Philippine Dealing & Exchange Corp. (PDEx).
It was the final tranche of a P15-billion shelf registration and was comprised of three-year bonds due in 2027, five-year bonds due in 2029, and seven-year bonds due in 2031.
EDC said that strong demand enabled the company to exercise an oversubscription option and raise an additional P4 billion.
The bonds were priced at the lowest end of the credit spread range, fetching rates of 6.7478 percent, 6.8873 percent and 7.0626 percent for the three-year, five-year and seven-year series, respectively.
EDC President and COO Jerome Cainglet noted that the "dangerously high heat indices" experienced in the country over the past weeks had led to a surge in demand for electricity, particularly for cooling, "which has significantly reduced our reserve levels and has put upward pressure on electricity prices."
"We look forward to adding renewable energy capacity to address these and, through the green bonds, present the public with the opportunity to participate in financing clean and renewable energy projects," he added, in line with EDC's mission of forging pathways for a "decarbonized and regenerative future."
EDC Chief Finance Officer Erwin Avante said the proceeds from the bond offer would be used mostly for geothermal projects, maintenance of other green projects, and for battery energy storage systems.
"Our capital expenditure [budget] for this year is around P40 billion, and this P10 billion [bond offering] is just part of that, so we're still talking to the banks for the balance," he added.
Avante said that half of the capex budget was intended for growth projects that were expected to be completed within the year, while the other half "is for our [geothermal] drilling, as we are drilling a lot of wells this year."
EDC was granted the go-ahead for its second tranche green bond offer by the Securities and Exchange Commission last May 10. The first tranche, amounting to P5 billion, was issued and listed in June 2021.
BDO Capital and Investment Corp. and BPI Capital Corp. acted as joint issue managers and were also joint lead underwriters and joint bookrunners together with China Bank Capital Corp. and SB Capital Investment Corp.
RCBC Trust Corp. and RCBC Capital Corp. were the trustee and selling agent, respectively, for the transaction.
EDC parent First Gen's shares dropped 1.53 percent to P17.98 each on Monday.
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