PSALM launches $500-M yen bonds

The Power Sector Assets and Liabilities Management Corp. (PSALM) launched yesterday its $500-million yen-denominated bonds which will be partially guaranteed by the Asian Development Bank (ADB).

"We are extremely pleased with the success of the issue, and that we are very grateful for the ADB’s support for this transaction and confidence in PSALM and the Philippine government. This is a very important milestone in our effort to privatize Napocor and Transco," PSALM president Edgardo del Fonso said.

He said the bonds, which were handled by the Nomura Securities, were offered in two different maturities. He said some $200-million bonds with maturity of 18 years were sold at 3.2-percent interest while $300 million worth of 20-year bonds were sold at 3.55-percent interest.

Proceeds from the bond offering would be used to finance the capital expenditures of the National Power Corp.

The bond float completes Napocor’s $750-million capital requirement for 2002. The state-owned power firm said it would need $1.5 billion capital to finance its operation for this year. Napocor was able to raise the first $750 million at the onset of this year.

Last week, Napocor signed a $250-million one-year bridge loan facility with 15 foreign and local banks, of which five are first time lenders of the power firm.

Del Fonso identified the five new lenders of the power firm and their corresponding loan amount as: DZ Bank AG Singapore ($20 million), Bank of China ($10 million), China Construction Bank ($10 million), Mashreqbank psc ($10 million) and National Bank of Kuwait S.A.K. ($10 million).

"There are a lot of new investors supporting Napocor right now. This only shows their confidence. Hope we could continue to access the market," del Fonso said.

Aside from the five new creditors, the other members of the loan syndicate and their respective loan amounts are: Citibank/Salomon Smith Barney ($30.5 million), Credit Lyonnais ($30.5 million), Standard Chartered Bank ($30.5 million), Sumitomo Mitsui Banking Corp. ($30.5 million), Chinatrust Commercial Bank ($20 million), UFJ Bank Limited ($20 million), KBC N.V. ($10 million), Land Bank of the Philippines ($10 million), United World Chinese Commercial Bank ($5 million) and the International Commercial Bank of China ($3 million).

Part of the proceeds of the bridge loan would be used by Napocor to refinance its debts. For the last quarter of 2002, the company has maturing obligations amounting to about $70 million to $80 million. Another $70 million to $80 million would settle part of the liabilities to the independent power producers (IPPs).

Del Fonso said the $250-million loan carries an interest of 1.10 percent per annum over one, three and six months US$ Libor for the first six months following drawdown date and 1.30 percent per annum for US$ Libor thereafter. – Donnabelle Gatdula