First Gen Corporation (PSE: FGEN) has obtained standby letters of credit (SBLCs) worth a total of PHP 24.75 billion from BDO Unibank, Inc., according to a disclosure filed with the Securities and Exchange Commission on April 17, 2026.

What Are Standby Letters of Credit?

Think of standby letters of credit like a promise from a bank. It’s similar to when someone guarantees they’ll pay if you can’t. In this case, BDO is promising to back up First Gen’s big purchase, making sure everyone involved feels safe about the deal.

What Is First Gen Buying?

According to the press release, First Gen is purchasing a 33% ownership stake in Prime Hydropower Energy, Inc. (PHEI), which is part of the Razon group of companies. First Gen’s fully-owned subsidiary, FGEN Aqua Power Holdings, Inc., now holds this 33% stake.

PHEI is currently building two major hydropower projects:

• The 600-megawatt (MW) Wawa Pumped Storage Hydro Project
• The 1,400-megawatt (MW) Pakil Pumped Storage Hydro Project

These are “pumped storage” facilities, which work like giant batteries for electricity. They store energy by pumping water uphill when power is cheap, then release it to generate electricity when demand is high.

The BDO Support

BDO issued two standby letters of credit: one for PHP 9.9 billion and another for PHP 14.85 billion, totaling PHP 24.75 billion to support this acquisition.

Special Conditions Attached

The press release explains that BDO required special conditions called “leadership continuity covenants” before issuing these standby letters of credit. These conditions are designed to ensure that the management team at First Gen and its parent company, First Philippine Holdings Corporation (FPH), remains stable.

Specifically, these covenants focus on keeping Federico R. Lopez (referred to as “FRL” in the document) in key leadership positions. The conditions state that certain changes in management would be considered a “Change of Management Control,” which would trigger an “Event of Default” in the FPH group’s outstanding loans.

What Would Trigger This Default?

According to the disclosure, a Change of Management Control would happen if any of these occur:

• Federico R. Lopez or his approved representative (called a “Designee”) stops being the Chief Executive Officer of First Gen
• Members of First Gen’s executive committee are no longer people chosen by Lopez
• Lopez or his Designee is no longer the proxy authorized to vote First Gen’s shares in PHEI
• Lopez stops being a director of FPH
• People chosen by Lopez no longer make up at least a majority of First Gen’s board of directors
• The directors that First Gen nominated to PHEI are no longer Lopez or his Designees
• Lopez and his family own less than 29.17% of Lopez Inc. (either directly or indirectly)

Why This Matters

The press release emphasizes that BDO’s decision to issue these standby letters of credit with these specific conditions shows the bank’s view that Federico R. Lopez’s continued involvement in the FPH group is “necessary, vital, and indispensable.”

The statement notes that this structure ensures the FPH group maintains a unified strategic direction under Lopez’s leadership and highlights the connection between the group’s financial stability and its leadership.

About First Gen Corporation

First Gen Corporation is a major power generation company in the Philippines. As of March 31, 2026, the company had 3,596,575,505 common shares outstanding. The company is headquartered at the 6th Floor Rockwell Business Center Tower 3, Ortigas Avenue, Pasig City.

This article is based on the company’s official press release and disclosures filed with the Philippine Stock Exchange’s Electronic Disclosure Generation Technology (PSE EDGE) system. For the complete and official version of the announcement, readers may visit the PSE EDGE website and search for the company’s filing directly.