MANILA, Philippines—Local debt watcher Philippine Rating Services Corp. has maintained the highest credit grade of triple A on Ayala-led Manila Water Co.’s P4-billion bonds maturing in 2013.
Bonds rated PRS Aaa suggests they are of “highest quality with minimal credit risk.” The borrower’s capacity to meet its financial commitment on the obligation is deemed “extremely strong.”
In a statement, Philratings said this assessment reflected the following key considerations: improvements in operational efficiencies; proactive management and competent technical staff with a proven track record; aggressive efforts to expand service areas with a current focus in the East Zone; as well as the company’s sustained profit performance and liquidity position.
Philratings said improvements in the company’s operational efficiencies had led to a wider water and wastewater service coverage area, broader network distribution and lower system losses or non-revenue water (NRW).
NRW declined further from 15.8 percent in 2009 to 11 percent in 2010, while sewerage coverage also improved from 16 percent in 2008 to 23 percent in 2010.
The management and staff of Manila Water are viewed as proactive as demonstrated by steps and initiatives that have already been taken or are being implemented given a forecast shortage of water supply by 2015 as predicted by the Metropolitan Waterworks and Sewerage System (MWSS), Philratings said.
For the medium term and by 2012, the company is looking at tapping Laguna de Bay as an alternative water source which can generate 50 to 150 million liters per day (MLD) of water. The company has also taken concrete steps to strengthen or prepare its facilities against possible earthquakes and floods.
Manila Water is also expanding its service area beyond the East Zone. Domestically, the company is eyeing Laguna, Boracay and Cebu and internationally, it plans to make inroads into Vietnam and India.
“These ventures would provide opportunities for growth in the coming years. Further expansion is also seen in the short to medium term, particularly in the province of Rizal,” the debt watcher said.
“Manila Water continues to show sustained profit performance and a healthy liquidity position,” Philratings said.