The Securities and Exchange Commission (SEC) granted Maynilad Water Services Inc. a permit to sell (PTS) the Philippines’ first peso-denominated SEC-registered blue bonds.
The financing tool allows Maynilad to raise capital specifically for projects that promote sustainable water management.
The Philippine Rating Services Corp. (PhilRatings) awarded Maynilad’s blue bonds the highest possible credit rating of PRS Aaa with a stable outlook on March 15, 2024. The rating represents minimal investment risk for interested parties.
Maynilad will offer the blue bonds for investment from July 1 to 5, 2024. Investors can choose from two fixed-rate options with a total principal value of up to P12 billion, with an additional oversubscription option of up to P3 billion.
The Series A blue bonds offer a 5-year term with a fixed interest rate of 6.7092 percent and mature in 2029. The Series B blue bonds provide a 10-year term with a fixed interest rate of 7.0931 percent and mature in 2034.
Funds raised through the blue bond offering will be used primarily for projects and activities that align with the government’s “Guidelines on Eligible Blue Projects and Activities for the Issuance of Blue Bonds in the Philippines”, under SEC Memorandum Circular No. 15, Series of 2023.
The guideline ensures responsible use of the capital to promote long-term water sustainability.
Blue bonds are a new financial instrument designed to fund environmentally-beneficial projects. Maynilad’s issuance marks a significant step towards environmental responsibility in the water sector.