Energy Development Corp (EDC), the largest geothermal energy producer in the Philippines, last night priced its $300 million 10-year bond. The Reg-S deal gathered more than $1.1 billion of demand, split over 86 orders.
The issuer is the first Philippine company to tap the US dollar bond market this year. Deutsche Bank and J.P. Morgan were joint bookrunners.
The deal went out with a whisper of low 200bp over the Republic of Philippines’ benchmark. Initial price guidance was defined in the area of 6.625% and the final guidance was 6.5% to 6.625%. The deal priced at 6.5%, at the tight end, which was equivalent to a spread of 200bp over the RoP 2021s. The notes were issued at par.
The pricing of the deal looked tight in comparison to SMC Global Power Holdings, which is planning a five-year US dollar bond rumoured to have a 6.5% yield. The company is in the midst of investor meetings. SMC Global Power is the holding group for San Miguel’s power assets.
In terms of distribution, Philippine investors took 45% of the deal, the rest of Asia took 34% and Europe took 21%. Fund managers bought 47%, banks 44%, private banks 5%, insurance companies 2% and others 2%.
EDC is a renewable energy company that owns geothermal power plants with a combined capacity of 1,000 megawatts. It is viewed by analysts as being a defensive play with stable recurring cashflow. Lopez Group’s First Generation Corp is a majority shareholder of EDC.
Also in the market last night was Chinese property developer Evergrande Real Estate, which was offering a dual-tranche synthetic offshore renminbi benchmark, expected to raise Rmb6.6 billion to Rmb10 billion ($1.1 billion to $1.5 billion). The bonds are denominated in renminbi, but settled in US dollars. Bank of America Merrill Lynch, BOC International, Citi and Deutsche Bank are joint bookrunners.
Elsewhere, China’s largest offshore crude oil and natural gas producer CNOOC plans to issue a 10-year and 30-year US dollar benchmark.
Barclays Capital, BOC International, Bank of America Merrill Lynch, Citi, Goldman Sachs and J.P. Morgan are joint bookrunners for the proposed Reg-S/144a bond.
The bonds are expected to be rated Aa3 by Moody’s and AA- by S&P. The company will be in Hong Kong today, and in Singapore, London, Boston and New York on Monday through Thursday next week.
