PSALM plans to issue P20B in bonds in ’11
MANILA, Philippines—State-run Power Sector Assets and Liabilities Management Corp. (PSALM) may issue peso-denominated bonds early next year to raise as much as P20 billion to settle part of the maturing debts of another government agency, the cash-strapped National Power Corp.
Tapping the credit market has become very likely as the government has slowed down the privatization of various energy assets.
The appointment of Independent Power Producer Administrators (IPPA) for the Unified Leyte geothermal power plant, the Naga power plant complex and the Malaya thermal power plant has been put on hold.
The sale of Power Barges 101-104, which was initially scheduled at the end of the year, has likewise been put on hold.
PSALM said it has yet to schedule the bidding for IPPAs to administer the contracted capacities of the 782-megawatt (MW) Caliraya-Botokan-Kalayaan hydropower plants, the 100-MW Western Mindanao Power Corp., the 50-MW Southern Philippines Power Corp., the 200-MW Mindanao coal power plant, the 92.52-MW Mt. Apo 1 and 2 geothermal power plants, and the 165-MW Casecnan hydroelectric power plant.
Meanwhile, the privatization of other remaining power plants such as the Agus-Pulangui hydro complex and the 850-MW Sucat facility will follow the directions of the Department of Energy, the PSALM board or an appropriate authority.
“The sale of the Agus-Pulangui power plants, for instance, will be conducted in consultation with Congress. The Sucat plant, meanwhile, may be recommissioned by the DOE as part of its Energy Reform Agenda,” PSALM explained.
On the planned bond flotation, PSALM president and chief executive Emmanuel Ledesma Jr. said the company was “leaning toward raising the necessary funds in the local currency, considering the successful government launch of the peso bonds in September. The final choice, however, will depend on what the PSALM board will deem as more advantageous to the government.”
Ledesma said the company’s present liability management program allowed it to either tap the local capital market or engage in dollar financing to settle the obligations.
Under the Liability Management Program Phase 2, the board of PSALM has allowed the corporation to issue peso-denominated bonds or avail itself of a local credit facility to raise up to P50 billion and to conduct a dollar-bond issuance of up to $1 billion.
So far, PSALM has only tapped the domestic capital market when it raised P30 billion from the issuance of five- and seven-year fixed-rate retail bonds in April. As such, PSALM may still be able to raise a maximum of P20 billion should it decide to raise funds locally.
Proceeds from the fund-raising activities will help service Napocor’s 2011 obligations amounting to $1.2 billion. The amount consisted of a $200-million bond issue that will mature in March 2011, and $400-million worth of floating-rate notes due in August next year, Ledesma disclosed.
The new PSALM board is set to meet this week to discuss further the corporation’s liability management program as well as the privatization schedule for the remaining government-owned power assets.
The board is expected to finalize PSALM’s privatization plan for the rest of 2010 and for 2011 even as the DOE continues to review the present program.
Tapping the credit market has become very likely as the government has slowed down the privatization of various energy assets.
The appointment of Independent Power Producer Administrators (IPPA) for the Unified Leyte geothermal power plant, the Naga power plant complex and the Malaya thermal power plant has been put on hold.
The sale of Power Barges 101-104, which was initially scheduled at the end of the year, has likewise been put on hold.
PSALM said it has yet to schedule the bidding for IPPAs to administer the contracted capacities of the 782-megawatt (MW) Caliraya-Botokan-Kalayaan hydropower plants, the 100-MW Western Mindanao Power Corp., the 50-MW Southern Philippines Power Corp., the 200-MW Mindanao coal power plant, the 92.52-MW Mt. Apo 1 and 2 geothermal power plants, and the 165-MW Casecnan hydroelectric power plant.
Meanwhile, the privatization of other remaining power plants such as the Agus-Pulangui hydro complex and the 850-MW Sucat facility will follow the directions of the Department of Energy, the PSALM board or an appropriate authority.
“The sale of the Agus-Pulangui power plants, for instance, will be conducted in consultation with Congress. The Sucat plant, meanwhile, may be recommissioned by the DOE as part of its Energy Reform Agenda,” PSALM explained.
On the planned bond flotation, PSALM president and chief executive Emmanuel Ledesma Jr. said the company was “leaning toward raising the necessary funds in the local currency, considering the successful government launch of the peso bonds in September. The final choice, however, will depend on what the PSALM board will deem as more advantageous to the government.”
Ledesma said the company’s present liability management program allowed it to either tap the local capital market or engage in dollar financing to settle the obligations.
Under the Liability Management Program Phase 2, the board of PSALM has allowed the corporation to issue peso-denominated bonds or avail itself of a local credit facility to raise up to P50 billion and to conduct a dollar-bond issuance of up to $1 billion.
So far, PSALM has only tapped the domestic capital market when it raised P30 billion from the issuance of five- and seven-year fixed-rate retail bonds in April. As such, PSALM may still be able to raise a maximum of P20 billion should it decide to raise funds locally.
Proceeds from the fund-raising activities will help service Napocor’s 2011 obligations amounting to $1.2 billion. The amount consisted of a $200-million bond issue that will mature in March 2011, and $400-million worth of floating-rate notes due in August next year, Ledesma disclosed.
The new PSALM board is set to meet this week to discuss further the corporation’s liability management program as well as the privatization schedule for the remaining government-owned power assets.
The board is expected to finalize PSALM’s privatization plan for the rest of 2010 and for 2011 even as the DOE continues to review the present program.
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