Maynilad Water Services, Inc., a subsidiary of Metro Pacific Investments Corporation (MPIC), in partnership with DMCI Holdings and Marubeni Corporation, is planning to issue bonds worth up to P15 billion.

Philippine Rating Services Corporation (PhilRatings) said it has assigned the highest Issue Credit Rating of PRS Aaa, with a Stable Outlook, to Maynilad’s proposed bond issuance of {P12.0 billion, with an Oversubscription Option of up to P3.0 billion.

Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong. A Stable Outlook means the rating is likely to remain unchanged in the next 12 months.

The assigned Issue Credit Rating takes into account Maynilad's exclusive right to provide water and wastewater services in its concession area and its proven capacity to operate in and navigate the challenges of a highly regulated industry.

PhilRatings also considered the Company’s experienced management and its strong parent support as a subsidiary of MPIC; its sustained profitability and sufficient debt coverage; and its ability to manage liquidity levels, supported by continuous cash collections from customers.

During the Metro Pacific earnings briefing early this month, MPIC Chief Finance, Risk and Sustainability Officer Chaye A. Cabal-Revilla said Maynilad is allotting P31.4 billion for capital expenditures this year.

Maynilad is the exclusive provider of clean water and wastewater services in the West Zone of the Greater Metro Manila. The Company’s concession area spans 540 square kilometers, encompassing 17 cities and municipalities.

In May 2021, the Revised Concession Agreement (RCA) was signed between Maynilad and Metropolitan Waterworks and Sewerage System (MWSS) confirming the extension of the concession term until 2037.

“Maynilad therefore, remains to have a monopoly of service and faces no direct competition in its serviced area until the end of the concession,” PhilRatings said.

It added that, with the successful renegotiation of the RCA, “Maynilad has demonstrated its capability to operate in and navigate the challenges of a highly regulated industry while managing the political risks that come with it.”
In 2023, Maynilad recorded a 53.4 percent increase in net income from P5.9 billion in 2022 to P9.0 billion, with a net profit margin (NPM) of 33.0 percent. Such was the highest NPM recorded since 2019.

“As water is a necessity, demand for it is relatively stable even in varying economic conditions. Customers tend to settle obligations in cash in a relatively timely manner. This is expected to support Maynilad’s liquidity position moving forward,” said PhilRatings.