21 Nov 2005
The National Power Corporation is floating zero-coupon bonds worth P5.5 billion (around $100 million) in the domestic financial market. The proceeds will be used to finance its capital expenditures and service its debts.
Guaranteed by the Philippine government, the bonds will be underwritten by the ING Bank N.V. BDO Capital and Investment Corp. and the PCI Capital Corp. will be the issue managers. The bonds, which will mature in 2012, will not pay interest and will be sold at a discount to their face value.
In explaining the state-owned power company’s need to borrow again, the Power Sector Assets and Liabilities Management Corp. (PSALM), the agency tasked to privatize the assets of National Power, pointed out that although the firm has posted a significant improvement in its operations and projects to break even this year, it still has to raise funds that can be used to settle its debt obligations and other funding requirements.
“We need to maintain our plants so they will not depreciate if we must maximize the proceeds from their eventual privatization,” said PSALM President Nieves L. Osorio. “We need money to do this.”
Today’s P5.5-billion float is the second time that National Power has entered the domestic bond market. Last May, the firm successfully floated P5 billion in power bonds in two tranches with a five-year and seven-year maturity period.
Last August, National Power reentered the international market by issuing a total of $400 million worth of six-year Floating Rate Notes.
Strategic Communications and Partnership Division |