By Zinnia B. Dela Peña (The Philippine Star) Updated January 06, 2012 12:00 AM
MANILA, Philippines - Power utility giant Manila Electric Co. (Meralco) has successfully raised P3 billion from the issuance of seven-year and 10-year fixed rate notes.
The notes issue, arranged by First Metro Investment Corp. (FMIC), was oversubscribed, with a wide mix of lenders such as universal, savings, trust and investment banks, as well as investment funds and insurance companies.
The notes, offered in two tranches, were fixed at a yield of 5.5346 percent per annum and 5.6387 percent, respectively.
“Last Dec. 16, 2011, Meralco successfully launched the notes issue to the market in less than three weeks, P3 billion was raised by various financial institutions and insurance companies. The Meralco notes were well-received by the market with an oversubscription over the planned issue size of P3 billion,” said Roberto Juanchito Dispo, president of FMIC.
Meralco president and chief executive officer Manuel V. Pangilinan said the issue was well received, reflecting investors’ strong confidence in the company.
The money would be used to help fund the utility firm’s capital expenditures, which include the improvement of its power distribution network, through the construction of new power facilities, substations and lines throughout its franchise area.
For this year, Meralco has set a capex program of between P10 billion and P11 billion.
Aside from this, Meralco is also pushing through with plans to build a $2.3-billion, 1,500-megawatt power generation portfolio in the next four to years.
The company said it expects the power generation business to drive income growth since profit from power distribution is seen to be flat this year.
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