Manila Water debuts sustainability bonds

MANILA, Philippines — Ayala-led Manila Water Co. Inc. has raised $500 million from its debut sale of sustainability bonds  to support its capital expenditure program and refinance existing debts.

In a regulatory filing, Manila Water said it successfully priced a dollar-denominated non-call five-year sustainability notes.

The bonds have a fixed coupon of 4.375 percent, payable semi-annually.

With orders of nearly $1.96 billion at its peak, the sustainability notes attracted active subscription from 85 quality institutional investors.

In terms of distribution, the order book was allocated predominantly to Asia at 79 percent, and the remaining 21 percent to Europe, Middle East and Africa.

The offering is the single largest green, social or sustainability bond issued by a listed private water utility in Asia and the first ASEAN sustainability bond by a corporate issuer out of the Philippines.

Proceeds of the bonds will be exclusively applied to finance or refinance a combination of both green and social projects that respectively offer environmental and social benefits.

Manila Water president Jose Almendras said the strong market response reflects investors’ confidence in the firm’s fundamental strength and stability as a leading Asian player in the water and wastewater industry.

“The issuance of this sustainability bond is fully aligned with our commitment to create shared value towards achieving the targets of the UN Sustainable Development Goals, especially SDG 6 which focuses on clean water and sanitation,” he said.

Manila Water recently established a sustainable financing framework with DNV GL, an international accredited registrar and classification society in Norway, providing a second party opinion.

Net proceeds from the offering will refinance the company’s maturing obligations, diversify funding sources and lengthen maturity profile.

The money raised will also support financing of important water and wastewater infrastructure projects in the east zone which will provide stable and predictable cash flows.

The projects include those that relate to sustainable water and wastewater management, terrestrial and aquatic biodiversity conservation, and affordable basic infrastructure.

The joint lead managers and joint bookrunners for the transaction were Ayala-led BPI Capital Corp., Citigroup Global Markets Singapore Pte. Ltd., Credit Suisse Singapore Ltd., The Hong Kong and Shanghai Banking Corp. Ltd. in Singapore, Mizuho Securities Singapore Pte. Ltd., and UBS AG Singapore Branch.