Lopez-led Energy Development Corporation (EDC) is planning to issue Php3 billion worth of Green Bonds with an oversubscription option of up to Php2 billion.
In statement, the Philippine Rating Services Corporation (PhilRatings) has assigned an Issue Credit rating of PRS Aaa, with a stable outlook for EDC’s proposed bond offer.
A PRS Aaa rating means the bonds are of the highest quality with minimal credit risk. It also signifies that the company’s capacity to meet its financial commitment on the obligation is extremely strong. Meanwhile, having a Stable Outlook means that the assigned issue credit is likely to remain unchanged in the next 12 months.
The proposed bond credit rating and outlook shows the firm’s leading position as a pure renewable energy (RE) company, with strong parent company support and highly-experienced management team; manageable decline in net income amid the COVID-19 pandemic; sufficient liquidity; and conservative capital structure.
Other than the Philippines, EDC is pursuing projects that will increase the capacity of its power plants, as well as doing pre-development work in countries such as Indonesia, Peru, and Chile, as a step to expand its overseas footprint.
PhilRatings also noted the positive developments in relation to policies that aim to increase the share of RE in the country’s energy mix.
Since there is an expected growth in demand for RE supply due to the policies, it can further help EDC with its continued growth and profitability over the long term.
“Going forward, EDC expects to continue to generate healthy operating cash flows and possess sufficient liquidity, supported by the continued profitability of its operations,” PhilRatings said.
Last year, EDC experienced a continuous positive operating net cash flow even during the COVID-19 outbreak, with a slight decrease from Php20.1 billion in 2019 to Php18.7 billion.
EDC is one of the leading pure RE companies in the country, with a portfolio consisting of geothermal, hydroelectric, wind, and solar power projects, with a combined installed capacity of 1,480 megawatts. It operates the Burgos Wind Farm in Ilocos Norte, the largest in Southeast Asia.