7 banks form loan syndicate

A consortium of seven European and Asian banks has been tapped to finance a $100-million bridge loan facility for Maynilad Water Services Inc.

The loan facility was signed March 10 by Rafael Alunan III, president of Maynilad, and representatives from the group of seven banks.

They are: Raissa Hechanova-Posadas, vice president of Citibank N.A.; Saadia Khairi, managing director, Citicorp International Limited; Paul Gregory, director for investment banking division, Barclays Capital Asia Ltd.; Joel Suarez and Geert Lippens of Fortis Bank N.V.; Jackie Surtani, KBC; Christophe Rousseau, Paribas; and Tomas Nortonde Matos, of Tokai Bank Ltd. Maynilad chairman Oscar Lopez and vice-chairman Yves Bories witnessed the signing.

Alunan described the loan facility as a significant step toward clinching the $350-million term loan by the end of the year and a sign of the lender's inherent confidence in the company's expansion and development program and in its sponsors, Benpres Holdings Corp. and Suez Lyonnaise des Eaux.

This was echoed by Hechanova-Posadas, who spoke on behalf of the Group of Seven banks.

She said the group was "pleased that the bridge loan facility is now behind us and we can now both direct our effects into working toward the closing of the main project financing."

She also underscored the importance of the loan to Maynilad's expansion program: "In Maynilad, you have an operating business with millions of customers, many capital expenditure projects, with just as many construction contracts and a distribution network spread out all over Metro Manila. Much remains to be done and we need Maynilad's and the sponsors' continued leadership, stewardship and commitment."

Alunan said the $100 million facility provides Maynilad timely funding sustenance at the threshold of an P8-billion capital investment program for the year 2000 alone.

For this year, Maynilad will replace 70 kilometers of pipes, install 40,000 new service connections, 1,000 valves and 600 fire hydrants, conduct leak detection on about 2,000 kilometers of pipes, repair 35,000 leaks and replace 200,000 water meters.