Meralco raises P4.8 billion from fixed-rate notes issue

MANILA, Philippines – Power distribution giant Manila Electric Co. (Meralco) is raising some P4.8 billion through the issuance of fixed-rate notes to partly fund its capital expenses.

In a disclosure to the Philippine Stock Exchange, Meralco said the facility will be handled by BPI Capital Corp. as issue manager and bookrunner.

The notes will be utilized by Meralco mainly to finance “general corporate purposes”.

“The seven- and 10-year notes, which were priced at 5.8327 percent and 6.4538 percent, respectively, will be issued on Dec. 2 (Thursday),” the company said.

Last October, Meralco chief finance officer Betty Sy-Yap hinted that the company may tap the financial markets for additional financing, noting that the prevailing low interest rates would give them better opportunities to raise funds.

“Interest rates are very low, there’s so much liquidity in the banking system today. and I think the confidence of investors in the Philippine business environment allows that,” Sy-Yap said.

In December last year, Meralco also signed a P5.5-billion fixed and floating rate notes facility agreement with 13 institutional lenders for its funding requirements.

It was lead arranged by First Metro Investment Corp., with SB Capital Investment Corp as co-lead arranger and Insular Investment and Trust Corp. as co-arranger.

The fixed-rate notes will mature on 2014. The issuance fetched a volume of P1.6 billion for the fixed rate while P3.9 billion was awarded for the floating rate notes.

The company spent over P7 billion for its capital expenditures this year to ensure the reliability of its system. The power distribution firm has over 4.5 million customers in its franchise area.