By Marianne V. Go (The Philippine Star) Updated August 13, 2011 12:00 AM
MANILA, Philippines - Boracay Island Water Co. has closed a P500-million loan with the Development Bank of the Philippines (DBP) and Security Bank Corp. (SBC) through the Philippine Water Revolving Fund (PWRF).
The P500-million loan will be used to finance the additional capital expenditures for the company’s environmental projects in Boracay over the next few years.
The loan is the first of its kind in the Philippine corporate market. It carries a 20-year tenor with an upsize feature of P500 million which, if exercised in full, will raise the total loan amount to P1 billion.
The loan structure with a 75-percent fixed and 25-percent floating rate seamlessly aligns with the company’s concession period of 25 years making cash flows more manageable and predictable.
The P1-billion term-loan facility will provide the company with the necessary financial support and flexibility to support key projects such as network improvement and expansion to achieve 100-percent water coverage by 2014 and 100-percent sewerage coverage by 2018.
The loan’s “first-to-market” structure is a testament to the confidence of the lenders (DBP and SBC) and funder Japan International Cooperation Agency (JICA) in Boracay Island Water considering that the company only started its operations more than a year ago.
The conclusion of the facility enables Boracay Island Water to fulfill its firm commitment to provide adequate quality water and sanitation services, support future growth and maintain environmental sustainability amidst the growing tourist inflow in the island.
This deal also highlights both lenders’ commitment to be active participants in providing public-private funding to support the social initiatives and infrastructure projects under the government’s public-private partnership (PPP) program.
Boracay Island Water Co. is a public-private partnership between the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) and Ayala-led Manila Water Co.
____________________________________________________________
