PSALM seeks better terms for $600-M bond flotation

Seeking better terms, the Power Sector Assets and Liabilities Management (PSALM) has asked the investment banks interested to handle the planned $600-million bond float of the state-owned National Power Corp. (Napocor) to revise their proposals.

PSALM president Edgardo del Fonso, in a telephone interview, said the interested banks need to have them reset their proposals in light of present conditions, so we can compare them on a consistent basis," he said.

The PSALM chief said they are just waiting for these new proposals before they announce their choice of ready to announce the chosen financial advisor soon. "Once these proposals are in we will make the decision," he said.

Asked what specific items the investment banks should change or update in their earlier submitted proposals, Del Fonso said the government needs better terms from the banks.

"We want them to say what pricing and other terms they expect under current conditions. Things have changed since they sent initial proposals in," he said.

Sources said Del Fonso is in Hong Kong to get the feel of the market on the planned bond offering, Energy Secretary Vincent S. Perez, on the other hand, will be gone for one week to an unknown destination (probably to follow Del Fonso in Hong Kong).

At least seven investment banks have reportedly submitted proposals to handle Napocor’s bond flotation. These are: Morgan Stanley and Credit Suisse First Boston; ABN Amro and Lehman; HSBC; and Deutsche and Salomon Smith Barneys.

It was reported that the banks have submitted proposals for bonds with 10-year maturity and may come in two tranches with a combination of US dollar and yen.

The proposed bond float forms part of the remaining $1.1-billion funding requirement of the state-run power generation firm for this year. The $500-million balance will come from the Asian Development Bank (ADB).