Monday, July 24, 2017

PSALM plans borrowings to settle maturing debts

Published July 23, 2017, 10:01 PM By Myrna M. Velasco

With protracted delay in the approval of its universal charge (UC) applications, the Power Sector Assets and Liabilities Management Corporation (PSALM) may opt to tap new borrowings to settle its maturing obligations summing up to roughly P100 billion primarily for 2018 and 2019.
First in line on PSALM’s maturing debts would be the R18-billion bullet payment failing due early part of 2018; and another P31 billion that will also lapse next year comprising both of regular loan amortizations and other bullet payments.
The heftiest amount due for settlement would be P50 billion in year 2019 – that accounted for the global bonds tapped by PSALM back in 2009.
In an interview with reporters, Finance Secretary and PSALM Board chairman Carlos Dominguez III indicated that before they would finalize borrowing plans for the state-owned company, they will need to discuss UC approval processes yet with the Energy Regulatory Commission.
“We’re going to talk to the ERC to speed up their decision, and then we’ll determine if we have to borrow,” he stressed.
He said they cannot ascertain the level of borrowings yet, and such would be a matter of discussion depending on the feedback that they can eventually get from the industry regulators.
PSALM has over P105 billion worth of pending UC applications – accounting for cost recoveries on stranded contract costs and stranded debts.
The company has petitioned for P27.7 billion worth of universal charge-stranded debts (UC-SD) recovery, which it has been anticipating for regulatory approval since last year. Over the longer term, the stranded debts level to be recouped had been placed at P70 billion. As estimated, the equivalent cost recovery for the UC-SCC will be P0.03 per kilowatt hour (kWh) over four years; and P0.06 per kWh for the UC on stranded debts.

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