AC Energy raises $400 million from green bond issue

MANILA, Philippines — AC Energy Inc., the Ayala group’s power business, has launched its first ever US dollar denominated perpetual, fixed-rate green bonds amounting to $400 million.

Proceeds from the issue will be used to fund the company’s renewable energy expansion in the Asia Pacific region.

In a disclosure to the Philippine Stock Exchange yesterday, AC Energy said the amount set for its inaugural US dollar-denominated senior perpetual fixed-for-life green bond issuance was $400 million with a fixed coupon of 5.65 percent for life with no step-up and no reset.

This represents the first US dollar denominated fixed-for-life green bond ever issued globally.

AC Energy chief finance officer Cora Dizon said the green bond offer is a step towards widening the company’s investor base.

“We recognize the fast-growing investor demand for green bonds, which we are leveraging to strengthen and diversify our sources of capital,” she said.

Dizon said the strong investor demand generated interest of over $1.2 billion and allowed AC Energy to raise $400 million.

AC Energy’s wholly owned subsidiary AC Energy Finance International Ltd. will issue the bonds which will be listed on the Singapore Exchange Securities Trading Ltd.

The bonds were also certified under the ASEAN Green Bonds Standards by the Philippine Securities and Exchange Commission last Nov. 18.

The ASEAN Green Bonds Standards is an initiative that facilitates ASEAN capital markets in tapping green finance to support sustainable regional growth and meet investor interest for green investments and is part of the ASEAN Capital Markets Forum’s broader efforts in developing green finance for the region.

Proceeds will be used 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,” AC Energy president and chief executive officer Eric Francia said.

“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,” he said.

As of this month, AC Energy has a net attributable capacity of over 1,600 MW, of which 600 MW is from renewable sources.