PSALM prepays export credit facility obtained in 2003

22 Dec 2009

The Power Sector Assets and Liabilities Management (PSALM) Corporation last 14 December 2009 successfully conducted another loan prepayment as it continues to earnestly pursue its liability management program.

PSALM prepaid the Export Credit Facility obtained by the National Power Corporation in 2003 from the Erste Bank der Oesterreicheischen Sparkassen AG (EBOS), one of the largest bank groups in Austria. The loan was extended by EBOS to finance National Power's procurement of equipment and supplies for the rehabilitation of the Agus Hydroelectric Power Plant six years ago.

PSALM prepaid the outstanding amount of EUR3,519,859.87 or USD5,158,706.63, with applicable interest, of the credit facility as it took advantage of current low interest rates in the market. Present value savings on the prepayment is at USD180,400, which includes savings in interest and guarantee fee. Proceeds from the privatization of National Power's assets were used for the prepayment.

The prepayment was approved by the PSALM Board on 29 August 2009, while the National Power Board gave its nod on 14 May 2009.

The successful prepayment became possible through the support provided by the Bangko Sentral ng Pilipinas and the Department of Finance, which ensured the smooth processing of the payments.

Aside from savings on interest payments and guarantee fees, the prepayment reduced National Power's foreign currency debt by .0081% and subsequently increased the peso component of the debt currency mix.

The settlement was made a day before PSALM successfully bid out the management of the contracted capacities of the San Roque, Bakun, and Benguet hydroelectric power plants on 15 December to end 2009 on a positive note. PSALM was also recently honored in the 2009 Triple A Awards of the prestigious Asset Magazine for its effective and diligent implementation of its power privatization and liability management programs.

So far, PSALM has successfully conducted five loan prepayments, with the first four being made in March, June, August and September 2008.

Strategic Communications and Partnership Division
Tel. No. (632) 9029067