AC Energy sets terms for US green bonds

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    Ayala-led power generation firm AC Energy Inc. has set the terms of its inaugural US dollar denominated senior perpetual fixed-for-life (non-deferrable) green bond issuance, the first US dollar denominated fixed-for-life green bond ever issued globally.

    The company said the offering will have an aggregate principal amount of $400 million with a fixed coupon of 5.65 percent for life with no step-up and no reset, priced at par and will be issued by AC Energy Finance International Ltd.

    It will be listed on SGX-ST and certified under the Asean Green Bonds Standards by the Philippine Securities and Exchange Commission earlier this month.

    AC Energy plans to deploy the funds for renewable energy expansion across the Asia Pacific region to include the Philippines, Indonesia, Vietnam, Myanmar, India and Australia, among others.

    “We are very pleased to see the strong reception among bond investors for our maiden perpetual green bond. We expect to add well over 1,000 megawatts (MW) of renewables capacity in 2020, and this fresh capital will further cement AC Energy’s commitment towards renewable energy and sustainability, and will support the company’s scaling up of renewable energy investments in the Asia Pacific,” Eric Francia, AC Energy president and chief executive officer, said in a statement.

    Cora Dizon, AC Energy chief finance officer, said the inaugural perpetual fixed-for-life green bond is a step towards widening the company’s investor base.

    “The strong investor demand generated interest of over $1.2 billion and allowed the company to raise $400 million,” Dizon said.

    Last February, the International Finance Corp. (IFC) and the Asian Development Bank (ADB) invested in AC Energy’s issuance of green bonds for a total of approximately P4.97 billion ($95 million).

    IFC provided an anchor investment of P3.93 billion ($75 million) on the public placement of the company’s five-year green bond that raised a total of $300 million from Philippine and international investors.

    IFC’s $75 million worth of five-year bonds with a coupon of 4.75 percent was listed on the Singapore Stock Exchange.

    On the other hand, ADB invested P1.05 billion ($20 million) on AC Energy’s 10-year bonds with a coupon of 5.25 percent that collected a total of $110 million worth of private placement that was also listed in Singapore.

    As of November 2019, the company has a net attributable capacity of over 1,600 MW, of which 600 MW is from renewable sources. Its goal is to exceed 5 gigawatts of attributable capacity and generate at least 50 percent of energy from renewables by 2025.