West Zone concessionaire Maynilad Water Services, Inc. said that its P15 billion blue bond offering will cater to water and wastewater projects, such as a treatment plant to support Kaliwa Dam.

“Well, certainly this is partly in support also of the government undertaking or initiative in the Kaliwa dam. While the government is building that dam, we are going to be building a treatment plant that will be in support of that dam,” Maynilad Chief Finance Officer Ricardo delos Reyes told reporters on Friday.

This project is part of the firm’s P31 capital expenditures (capex) for this year, up by 19 percent from last year’s P26-billion record.

The bulk of the fund or P11.4 billion will go to wastewater management projects, including the construction of new sewage treatment plants and sewer lines.

The P8.72 billion will go to water source projects that will provide alternative raw water sources and boost supply for its more than 9.5 million customers.

Some of the P10.27 billion will be earmarked for operational support projects, such as water reservoirs and primary lines, and nonrevenue water reduction program and service expansion initiatives.

Delos Reyes said that it will undertake fundraising initiatives to raise an additional P6 billion for its capex program.

Blue bond rates

It was reported earlier that Maynilad will offer P12 billion fixed-rate, peso-denominated blue bonds, with an oversubscription option of up to P3 billion with tenors of five years and/or 10 years.

Five-year tenor bonds have an indicative yield of between 6.798 and 7.0698 percent while the 10-year bonds have initial rates of 7.1197 percent to 7.5197 percent.

Blue bonds refer to a subset of green bonds and sukuk whose proceeds will exclusively be used to finance or refinance new and/or existing eligible blue projects and activities.

The Securities and Exchange Commission mandates that proceeds from blue bonds will be used primarily to finance eligible blue activities.