Debt watcher keeps Manila Water’s top rating

Manila Water maintained its top rating with local debt watcher Philippine Rating Services Corporation (PhilRatings), as the water utility company issued outstanding P4 billion in bonds set to mature in 2013. The Ayala-owned utility maintained its PRS Aaa rating – the highest rating assigned by PhilRatings, given to “obligations of the highest quality and with minimal credit risk. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong." Philratings considered Manila Water’s improvements in operational efficiencies, competent management and staff, as well as the water utility’s expansion efforts, sustained profit performance and liquidity position. The local debt watcher said it shall keep on monitoring developments regarding Manila Water, adding that it “may change the ratings at any time, should circumstances warrant a change." Manila Water’s net income slipped three percent in the first three months of the year despite higher revenues, dipping to P816 million in January-March as compared to P839 million last year. But data from Manila Water showed that improvements in the company’s operational efficiencies led to a wider water and wastewater service coverage area. System losses were reduced to 11 percent in 2010 from 15.8 percent in 2009. Sewerage coverage also expanded to 23 percent in 2010 from 16 percent in 2008. Manila Water said in its 2010 Annual Report that the company is expanding its service area beyond the East Zone. Within the country, the utility company has expanded its services to the province of Laguna and the island of Boracay, as well as internationally in Vietnam and soon, India. “Over the past year, the potential of Manila Water’s new business intitatives have started to bear fruit with the Laguna and Boracay concessions delivering solid business results during the first full year of operations. The Company’s operations in Vietnam have outperformed contractual targets," the report stated. In April, Manila Water announced that it signed an agreement to issue P10 billion in fixed corporate notes – its biggest borrowing to date – to partly fund Manila Water's investment plan for 2011. It also said that Manila Water continues to show sustained profit performance and a healthy liquidity position. Last year, total revenues soared to P11 billion or a 16 percent growth over 2009 revenues of P9.5 billion. — MRT/KBK, GMA News