Officials of Maynilad Water Services Inc. and Philippine Dealing and Exchange Corp. on Friday celebrate the listing of the first ever blue bonds offered in the Philippines. The west zone concessionaire earlier raised P15 billion from the sale of the thematic bonds, which are issued to secure financing for water and wastewater projects. —Jordeene B. Lagare
West zone concessionaire Maynilad Water Services Inc. plans to stage its stock market debut in early 2025 as it is exploring options to raise up to P35 billion for next year’s capital spending.
Maynilad president and CEO Ramoncito Fernandez said Maynilad was considering going public sometime after the 2025 elections or early 2026, taking into account various political, social and economic factors.
“But the timing will be the strategic move that we have to choose because [launching the initial public offering, or IPO, will depend] on market conditions,” he told reporters on the sidelines of the firm’s blue bond listing on Friday.
READ: Maynilad preps for mandated IPO slated after 2025 polls
Maynilad, the largest private concessionaire in terms of customer base, is mandated by its concession agreement with the government through the Metropolitan Waterworks and Sewerage System to conduct its IPO on or before January 2027.
The water company holds a 25-year legislative franchise, per Republic Act No. 11600, to establish, operate and maintain a waterworks system and sewerage and sanitation services in the west zone service area of Metro Manila and the province of Cavite. It is mandated to offer at least 30 percent of its outstanding capital stock to the public within five years from the effectivity of the law, which was signed in December 2021.
Fernandez did not disclose the initial size of the IPO, but a Bloomberg report in September last year said this would allow them to generate between $750 million and $1 billion.
The Maynilad executive said their P15-billion maiden blue bond offering, the first of its kind in the country and for the company, “is a precursor to an even larger goal” and “lays the groundwork for our future IPO.”
READ: Maynilad to raise an additional P6B later this year
Blue bonds are thematic bonds whose proceeds will be used exclusively to finance or refinance new or existing projects on water and wastewater management, ocean protection, among others.
Maynilad’s issuance was more than two times oversubscribed which, according to Fernandez, was “a testament to the confidence” of the investing community in the company.
The debt papers were issued in two tranches: Series A, or the five-year fixed rate bonds with an interest rate of 6.7092 percent due in 2029; and Series B, or the 10-year fixed rate bonds carrying an interest rate of 7.0931 percent due in 2034.
BPI Capital Corp. acted as the sole issue manager for the sale. Together with BDO Capital & Investment Corp., First Metro Investment Corp. and East West Banking Corp., it is also underwriter and bookrunner.
Fernandez said proceeds would be used for several pipe laying projects in Muntinlupa and in Cavite province, a new pumping station and reservoir in Valenzuela City and a water reclamation facility in Central Manila.
Maynilad is looking into other fundraising activities to raise between P25 billion and P35 billion in 2025 through a combination of bilateral loans, internally generated funds and other instruments for its capital expenditure (Capex) next year.