PSALM prepays $219M in Napocor debts
By Abigail L. Ho
Philippine Daily Inquirer
First Posted 03:55:00 08/23/2008
MANILA, Philippines—In a bid to further cut debts of government-owned electricity producer National Power Corp. (Napocor), the privatization agency Power Sector Assets and Liabilities Management Corp. (PSALM) has prepaid $219 million of Napocor loans.
In a statement Friday, PSALM said this round of prepayments covered dollar- and yen-denominated debts worth $126 million and 10.2 billion yen, respectively.
These loans were extended by the Asian Development Bank and the Japan Bank for International Cooperation for the 600-megawatt Masinloc coal-fired power plant that PSALM sold last year.
This $219-million loan prepayment was PSALM’s third for the year.
In June, PSALM prepaid 27.2 billion yen (around $263 million) of Napocor’s debts, representing Tranche B of the Miyazawa yen-denominated loans extended by the Japanese government in 1999.
The loan bankrolled the construction of a number of transmission projects, which were then under Napocor’s jurisdiction.
Prior to that prepayment, PSALM in March also prepaid three of Napocor’s yen-denominated loans worth 16.887 billion yen, or around $174 million.
These loans were extended in 1995 and 1997 by the JBIC-Overseas Economic Cooperation Fund, also for transmission projects.
“The total prepayment to date has contributed significantly to reducing Napocor’s debt obligation from $7.01 billion as of end-2007 to $6 billion. The successful prepayment was made possible through the support provided by the Bangko Sentral ng Pilipinas [the central bank], which ensured the smooth processing of the payments,” PSALM vice president for finance Lourdes Alzona said.
PSALM capital markets and risk management department manager Ferdinand Florendo said that aside from savings on interest payments and guarantee fees, “the prepayment reduced Napocor’s foreign exchange debt by 4 percent and increased the peso component of the debt currency mix by two percent to 13 percent.”
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