Manila Water to raise P10B from notes issue

MANILA, Philippines - Ayala-led water utility concessionaire Manila Water Corp. is issuing P10 billion in fixed rate corporate notes to partly fund its capital expenditures for this year.

Manila Water’s P10-billion fixed rate corporate notes is already fully subscribed by a consortium of lenders composed of Metropolitan Bank and Trust Co. (Metrobank), Philippine Savings Bank (PSBank) and First Metro Investment Corp. (FMIC).

The note issuance was solely arranged by FMIC and will be issued in two tranches. The first tranche is a 10-year note with a call option on the seventh year, while the second tranche is a straight five-year note.

According to Manila Water, proceeds from the issue will be used to partly fund the water firm’s investment plan for 2011 which includes water and wastewater coverage expansion, new water source development, and various systems enhancements.

In its disclosure to the Philippine Stock Exchange, Manila Water said that the Metrobank Group has been a strong supporter of the water firm over the years.

Metrobank was one of Manila Water’s first lenders, while FMIC was one of the domestic co-lead underwriters for Manila Water’s initial public offering (IPO) in 2005.

PSBank, for its part, was a participant in the East Zone concessionaire’s initial bond offering in 2008.

Meanwhile, West Zone concessionaire Maynilad Water Services Inc. (Maynilad) announced that it has recently completed its 23 million liters (ML) Pagcor Reservoir near Macapagal Ave. in Parañaque City.

Considered as the largest triangular reservoir in the Philippines, the Pagcor Reservoir has a height of 26 meters, which is nearly as high as a nine storey building.

“Our new Pagcor pumping station and reservoir is a critical component of Maynilad’s long-term plan to provide reliable and affordable water services to our customers. The facility will help us distribute water to our customers living in the South,” according to Maynilad president and CEO Ricky Vargas.

Once fully operational, the P680-million Pagcor pumping station and reservoir can provide around 300 million liters per day (MLD) of potable water to customers in Parañaque, Las Piñas, Cavite City and the five municipalities of Cavite Province.

Initially, the facility will benefit over 64,000 existing customers in Cavite and Las Piñas.

However, once Maynilad’s pipe-laying activities along Aguinaldo Highway and Tirona Road are completed, over 166,000 households more can benefit from the facility.

Maynilad is owned and managed by DMCI-MPIC Water Co., Inc., a joint venture between Metro Pacific Investments Corp. and DMCI Holdings Inc.

It serves the west zone of the greater Manila area, which is composed of the cities of Manila (all but portions of San Andres and Sta Ana), Quezon City (west of San Juan River, West Avenue, EDSA, Congressional, Mindanao Avenue, the northern part starting from the Districts of the Holy Spirit and Batasan Hills), Makati (west of South Super Hiway), Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas and Malabon all in Metro Manila; Cavite City, and the towns of Bacoor, Imus, Kawit, Noveleta and Rosario, all in Cavite Province.