London-based debt watcher Fitch Ratings upgraded its assessment of Power Sector Assets and Liabilities Management Corp.’s (PSALM) note issuance following a similarly positive action on Philippine sovereign ratings.
In a statement, Fitch affirmed the $500-million fixed-rate notes of PSALM due November 2016 at “BBB-” with the outlook revised to “positive” from “stable.”
“The rating on the notes is credit-linked to that of the Philippines as the notes are irrecoverably and unconditionally guaranteed by the Republic of Philippines,” Fitch said.
The rating action follows the revision of the outlook on the Philippines’ long-term foreign-currency issuer default rating of ’BBB-’ to “positive” from “stable.”
Any changes to the Philippines’ rating will result in a corresponding action on the notes’ rating, Fitch said, adding that no third-party due diligence was provided or reviewed in relation to this rating action.
PSALM is mandated to privatize the assets of the National Power Corp. (Napocor), which used to have a monopoly on power generation, and to liquidate Napocor’s financial obligations.