22 Nov 2005
A total of P5.6 billion was raised to meet the National Power Corporation’s remaining cash requirements this year during yesterday’s (Nov 22) auction of zero-coupon bonds at the Bureau of Treasury.
Zero-coupon bonds to mature in 2012 with face value of P11 billion were fully subscribed by domestic investors at a yield of 9.87%. The proceeds of P5.6 billion will be used to finance National Power’s capital expenditures and service its debts.
“We were happy with the results, we got better than what we initially projected,” said Power Sector Assets and Liabilities Management Corporation (PSALM) president Nieves L. Osorio. PSALM is the agency tasked to privatize the assets and manage the liabilities of the National Power.
Guaranteed by the Philippine government, the bonds were floated with the ING Bank N.V. as arranger, issue manager and underwriter. BDO Capital and Investment Corp. and the PCI Capital Corp. also acted as joint issue managers. The original projection was to raise at least P5.5 billion.
Osorio said that today’s successful fund-raising completes National Power’s cash requirements for the year.
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 borrow cash 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 |