Manila Water Co. Inc. is considering issuing US dollar-denominated “sustainability bonds” abroad, intended for refinancing debt and funding their capital expenditure for this year and next.
Manila Water made the announcement of their plans, which would proceed depending on market conditions, following similar efforts by sister firm AC Energy Inc.
The Ayala group’s energy platform has launched overseas a series of green bonds, which were certified as Climate Bonds under the Climate Bonds Standard.
As of February 2020, according to AC Energy, proceeds of its green bonds have bankrolled a total of $261.5 million worth of overseas projects, all within Southeast Asia.
Manila Water said in a disclosure its planned issuance of senior unsecured notes qualify as ICMA (International Capital Market Association) Sustainability Bonds and Asean Sustainability Bonds.
The Switzerland-based ICMA explains that the bond markets—through green, social and sustainability bonds as well as sustainability-linked bonds—can play an essential role in attracting private capital to finance investments that provide environmental and social benefits.
Manila Water has developed a sustainable financing framework, with Norway-based consultancy DNV GL providing a second party opinion.
“Net proceeds from the issue of the notes are intended to refinance debt and finance programmed capital expenditure for 2020-2021, pursuant to the sustainable financing framework,” Manila Water said.
Projects that stand to benefit are related to the Ayala unit’s efforts on sustainable water and wastewater management, terrestrial and aquatic biodiversity conservation, and affordable basic infrastructure.
Further, Manila Water said the framework complies with the Green Bond Principles 2018, Social Bond Principles 2018 and Asean Sustainability Bond Standards as well as Securities and Exchange Commission policy.
For the planned issuance, Manila Water tapped BPI Capital Corp., Citigroup Global Markets Singapore Pte. Ltd., Credit Suisse (Singapore) Ltd., The Hongkong and Shanghai Banking Corp. Ltd, Singapore Branch, Mizuho Securities (Singapore) Pte. Ltd. and UBS AG Singapore Branch as joint lead managers and joint bookrunners.