Meralco inks P5-B notes facility

MANILA, Philippines – Power utility giant Manila Electric Co. (Meralco) signed yesterday a P5-billion notes facility agreement with First Metro Investment Corp. (FIMC), the investment arm of the Metrobank Group.

In a disclosure to the Philippine Stock Exchange, Meralco said FIMC will serve as the loan’s arranger and bookrunner.

Meralco said it will use the proceeds of the fixed rate notes due 2015 and 2016 to refinance existing debt obligations, while a portion will fund corporate requirements.

The notes will be issued today, Dec. 21.

Last month, Meralco has raised P4.8 billion worth of fixed rate notes to partly fund capital expenses. The issuance was handled by BPI Capital Corp. as issue manager and book runner.

Last October, Meralco chief finance officer Betty Sy-Yap said the company might tap the financial market as the prevailing low interest rates 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.

The company spent over P7 billion for its capital expenditures this year to ensure the reliability of its system.

At present, the power distribution firm has over 4.5 million customers in its franchise area.

Meralco is owned by Philippine Long Distance Co. (PLDT,) San Miguel Corp., First Philippine Holdings and other minority shareholders.