AC Energy has arranged a $1 billion medium term note program (MTN) and two series of notes worth $410 million to fund its expansion plans in the Asia Pacific region.
AC Energy will utilize the net proceeds of the notes for green projects in accordance with its Green Bond Framework. AC Energy is making investment in renewable energy projects in Vietnam, the Philippines, Indonesia, and others within the Asia-Pacific region.
AC Energy will use the funds for assets and projects that have low carbon impact and further climate resiliency. AC Energy is aiming to grow its energy capacity to 5 GW, with 50 percent of its total energy output backed by renewable energy, by 2025.
This inaugural climate bond issuance by AC Energy marks the first Climate Bonds Initiative (CBI) certified US dollar climate bond in Southeast Asia to be listed on the Singapore Stock Exchange.
Milbank, Tweed, Hadley & McCloy represented Bank of America Merrill Lynch, HSBC and CLSA as joint arrangers and dealers in connection with the establishment of a $1 billion medium term note program (MTN) issued by Cayman Island-based AC Energy Finance International and guaranteed by Philippines-based AC Energy, and the issuance of two series of notes worth $410 million.
The notes are a drawdown from the MTN and comprise of one series, and comprise: an initial issuance of $225,000,000 4.75 percent notes due 2024, and the issuance of an additional tranche of $75,000,000 in 2024 Notes, and a second series issuance of $110,000,000 5.25 percent notes due 2029.
International Finance Corporation (IFC) invested $75 million in the 2024 Notes in line with its commitment to grow green capital markets, including infrastructure-targeted green bonds. Asian Development Bank (ADB) invested $20 million in the 2029 Notes. It was the third climate bond project and its first publicly listed climate bond investment.
The Milbank team was led by Capital Markets partner James Grandolfo and Counsel Paul Pery, along with associate Cheyne Cudby. Alternative Investments partner James Warbey and associate Chris Burke provided support from London.
“The green bond issuance will greatly expand AC Energy’s renewable energy portfolio and further global sustainability measures,” James Grandolfo said.