Solar Tarlac offering seen to raise P4.15B

Renewable energy firm Solar Philippines Tarlac Corp. (Solar Tarlac) is raising as much as P4.15 billion from a proposed offering of “green” bonds, which obtained a double-A plus credit rating from local debt watchdog Philippine Rating Services Corp. (PhilRatings).

Proceeds from the bond float will be used to refinance a P2.22-billion loan used for the construction of Solar Tarlac’s now-operating 100-megawatt solar farm in Concepcion, Tarlac, and the expansion of the solar power plant capacity to 150 MW.

Solar Tarlac is a joint venture between Solar Philippines Power Project Holdings Inc. (Solar Philippines), founded by entrepreneur Leandro Leviste, and tycoon Enrique Razon’s Prime Metro Power Holdings Corp.The credit rating of “PRS Aa plus” with a stable outlook suggests that the upcoming issuance is of “high quality” and “subject to very low credit risk.” The issuer’s capacity to meet its financial commitments is deemed “very strong.”

A stable outlook means the rating assigned by Philratings is likely to be maintained in the next 12 months.

In assigning the rating and outlook, PhilRatings said it had considered the significant market position in the solar energy industry of the project sponsors, alongside its asset and customer concentration risk.

It deemed Solar Tarlac’s construction risk as “very manageable,” while market risk was seen to be mitigated by a 20-year take-or-pay power purchase agreement with Manila Electric Co.