Meralco raises bond offer to P18.5 B

MANILA, Philippines - Manila Electric Co. (Meralco), the country’s biggest power distributor, has raised the amount of fixed rate bonds it would issue P18.5 billion from an earlier plan of P15 billion.

In a disclosure to the Philippine Stock Exchange (PSE), Meralco said this was in response to the strong demand from retail investors.

 â€œMeralco, upon the request of joint issue managers and joint lead underwriters, exercised P3.5 billion in the over allotment option of its debut bond offering following the strong demand from retail investors during the offer period,” Meralco said.

As such, from a base offering of P15 billion, the total 12-year and seven-year bonds to be issued on Dec. 12, 2013 will amount to P18.5 billion, making it the largest single corporate bond issuance for the year, the company added.

The 2020 bonds have an interest rate of 4.375 percent while the 2025 bonds will have an interest rate of 4.875 percent.

Meralco tapped BPI Capital Corp. and First Metro Investment Corp. as joint issue managers and joint lead underwriters, with RCBC Capital Corp. and Philippine Commercial Capital Inc. as participating underwriters.

Philippine Rating Services Corp. (PhilRatings), a local credit rating agency, earlier assigned an issue credit rating of PRS Aaa to Meralco’s proposed debt

A PRS Aaa rating is PhilRatings’ highest score reflecting minimal credit risk. It means that the obligor’s capacity to meet its financial commitments on the obligation is extremely strong.

 â€œThe rating takes into consideration the following factors: Meralco’s robust cash flows and sustained profitability; its dominant franchise; its experienced management team and shareholders; as well as its conservative capital structure and strong financial flexibility,” PhilRatings said.