23 Apr 2010
The innovative liability management program of the Power Sector Assets and Liabilities Management (PSALM) Corporation is reaping rewards as PSALM became the first government-owned and -controlled corporation (GOCC) to be listed in the Philippine Dealing and Exchange Corporation (PDEx) after its successful debut in the domestic capital market.
In simple ceremonies held Thursday, 22 April 2010, PSALM's PhP30 billion worth of five-and seven-year fixed-rate retail bonds were officially listed in the PDEx, a licensed exchange facility that provides a centralized and efficient infrastructure for trading securities to ensure price discovery, transparency, and investor protection.
The listing followed PSALM's successful sale of the retail bonds, the largest peso-denominated debt issue offered in the Philippine capital market so far this year, which were priced at yields of 6.875% for the five-year tranche and 7.750% for the seven-year tranche.
PDEx Chairman and Chief Executive Officer Vicente B. Castillo formally welcomed PSALM to its growing issuer community as the 12th listed issuer to enter the secondary market, where previously issued bonds, notes or shares are bought and sold to help reduce investment risks and maintain liquidity in the financial system.
"This listing is very crucial because this is the first issue with a credit enhancement -a guaranteed bond - making this a Philippine credit risk-free issue," said Mr. Castillo, who disclosed that the PDEx's total listed level has reached PhP149.3 billion.
This means that "our corporate issues are coming in steady streams to satisfy the growing appetite of our investor market for a wider array of options. And our trading community has responded with equal energy to commit themselves to support the liquidity of our private issuers and drive our investors' appetite," he pointed out.
Securities and Exchange Commission Chairman Fe B. Barin congratulated PSALM, PDEx, the market makers, and the investors for working together to ensure the success of the undertaking, stressing that their efforts will redound to the country's economic growth.
For her part, PSALM Acting President and Chief Executive Officer Ma. Luz Caminero noted that the support of the PDEx will ensure the viability of the bonds in the market. "As a long-term impact, this support will boost the relationship of PSALM with the community of investors, who are now assured of the best pricing for their acquired bonds, with the PDEx facilitating the transactions," she said.
In his brief message, Department of Energy Secretary Jose C. Ibazeta commended PSALM for its "innovative type of liability management," expressing his hope that there will be more issues from GOCCs, specifically those with good balance sheets.
"PSALM has gone a long way," he said. "We've managed to put our name in front of the investor community. We've been accepted by the world, and we'd like to thank the investment managers for helping us get there."
The savings derived from this fund-raising activity will be prudently used to liquidate the outstanding debts of the National Power Corporation and to increase the working capital for PSALM's operations.
Corporate Communications Division