Chapter 15

Casecnan Water & Energy Company,

the Philippines

Project summary^1

The Casecnan Water & Energy project consists of structures in the Casecnan and Denip
Rivers that divert water into a 23-metre tunnel into the Pantabangan Reservoir for irriga-

Type of project

Irrigation and hydroelectric power facility.

Country

The Philippines.

Distinctive features

• One of the largest irrigation and hydroelectric power generation projects in the
  world.


• One of the largest high-yield project bond offerings.


• Large amount of financing for a Philippine project.


• Financing divided into several tranches to appeal to different investors’ interests.
  •Tight time frame for original financing.


• Default by South Korean equipment, procurement and construction (EPC) contrac-
  tor, subsequent drawing under standby letter of credit and refusal by opening bank
  to pay.


• Strain on project liquidity and need for parent support because of construction
  delay.

Description of financing

The 1995 financing was in three tranches, all placed privately under Rule 144A:

• US$100 million in senior secured notes, Series A, due in 2005;
  •US$181 million in senior secured bonds, Series B, due in 2010; and


• US$75 million in floating-rate notes due in 2002.