Napocor’s $600-M bond offering to be delayed

The planned offering of $600 million in bonds by the National Power Corp. (Napocor) is likely to be delayed until November this year, from an earlier target of August to October, a ranking company official said yesterday.

The official, who is privy to the ongoing preparations for the bond flotation, said the delay is an offshoot of a condition imposed by the Asian Development Bank (ADB) that any plan to float bonds should be done after the $200-million third tranche ($100 million from ADB and $100 million from Japan Bank for International Cooperation) of the Power Sector Reform Loan is released within the fourth quarter or by November at the latest.

"The ADB is meeting the officials of the Bureau of Treasury, Department of Finance, and the Power Sector Assets and Liabilities Management Corp. (PSALM) Tuesday up to Thursday this week to discuss who will handle the flotation and thresh out the other remaining issues," the official said.

The official said the ADB is requiring the government to comply first with certain conditions such as the formation of the wholesale electricity spot market (WESM) before it releases the third tranche of the PSRL. WESM is envisioned to operate like a stock market where electricity will be traded everyday, thus allowing more completion in the power sector.

It was learned that the establishment of the WESM would be delayed until November this year following the decision of the World Bank not to concur the award of contract to Alstom Philippines for the interim market management.

There are at least seven investment banks that are included in the shortlist of possible underwriters for the issuance of 10 to 20-year bonds. "We would probably choose only one among these banks," the official said.

Napocor still needs to raise some $1.1 billion to cover its financing needs for the year.