First Gen Corp. to redeem early $90-million bonds

MANILA, Philippines — Lopez-led First Gen Corp. is eyeing to redeem over $91 million of its 10-year bonds listed at the Singapore Exchange Securities Trading Ltd. (SGX) next month to reduce its debt exposure.

In a disclosure to the Philippine Stock Exchange yesterday, First Gen said it has sent notice to noteholders of its intent to partially buy back the SGX-listed $300 million, 6.5 percent fixed rate notes due 2023.

The company will be redeeming all outstanding notes worth $91.69 million at a redemption price of 103.25 percent.

First Gen has set the redemption period on Oct. 9.

The company first announced its plans to buy back its 10-year bonds listed at SGX late last year.

“As part of First Gen’s debt reduction plan, we purchased some of its US dollar bonds listed in the Singapore Exchange,” First Gen chief finance officer Emmanuel Singson said earlier.

In October 2013, First Gen raised $300 million through a 10-year, non-call senior unsecured bond to finance investments in power projects and general corporate purposes.

At that time, the company was building the 420-megawatt (MW) San Gabriel project, located adjacent to its existing power plants in Batangas, namely the 1,000-MW Sta. Rita and 500-MW San Lorenzo gas plants. The San Gabriel plant started commercial operations in late 2016.

The power plant is now a major contributor to the company’s performance.

In the first half, First Gen reported a 35 percent jump in recurring net earnings from $85 million last year to $115 million this year. Consolidated revenues also rose 10 percent from P854 million to $939 million.

The company attributed the increase to the strong numbers delivered by its natural gas platform, boosted by lower interest expenses as a result of its deleveraging initiatives.

The solid showing from the 97 MW Avion peaking plant and the 420-MW San Gabriel flex plant, as well as savings in interest expense, offset unrealized foreign exchange losses and the renewable energy businesses’ lower earnings in the first half of 2018,” the company said.