INTERVIEW:Philippine Napocor Eyes $500M Borrowing Mar -2
Thursday, February 23, 2006
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February 22, 2006 03:00 ET
Philippine Napocor To Ask For Borrowing Proposals Soon
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February 22, 2006 03:01 ET
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February 22, 2006 03:01 ET
INTERVIEW:Philippine Napocor Eyes $500M Borrowing In Mar By Ditas Lopez
Of DOW JONES NEWSWIRES
MANILA (Dow Jones)--National Power Corp. (NAP.YY), the Philippines' main power producer, wants to borrow at least $500 million or its equivalent from the international capital market as early as March, said a senior official from the state agency in charge of Napocor's privatization Wednesday.
Nieves Osorio, president of the Power Sector Assets and Liabilities Management Corp., told Dow Jones Newswires that Psalm expects to issue a request for proposal for Napocor's borrowing soon to capitalize on improving investor interest in the utility.
"We were planning to do that as early as January but we couldn't hold it simultaneously with the national government, and February was a really busy month," Osorio said.
In January, the government issued $1.5 billion in 25-year bonds and EUR500 million in 10-year bonds. Fund managers flocked to the deals that were brought into the market by Citigroup (C), Credit Suisse (CSF.YY), Deutsche Bank (DB), and UBS (UBS).
Osorio, who was part of the Philippine delegation that held a non-deal roadshow in Japan last week, said a Japanese financial institution offered to arrange a yen-denominated borrowing for Napocor.
"I told their intermediary to bid when we issue the RFP. I said if you want to get the deal, then offer a very good rate," she said, declining to name the Japanese firm.
Psalm and Napocor have yet to decide whether to borrow in dollars, euro, or yen, Osorio said.
Napocor has a financing requirement of between $500 and $700 million for this year, with the actual figure depending on the size of proceeds from the Napocor's privatization.
(MORE TO FOLLOW) Dow Jones Newswires
February 22, 2006 03:03 ET
INTERVIEW:Philippine Napocor Eyes $500M Borrowing Mar -2
Osorio wouldn't say how many or which banks will be invited to submit funding proposals.
She made clear, though, that the final decision on the timing of Napocor's borrowing will depend on separate resolutions from the boards of both Napocor and Psalm.
Napocor last tapped the international debt market in late August 2005 via a $100 million reopening of its six-year floating rate bond that was managed by Bear Stearns. The reopening followed warm investor response to its $300 million six-year bond that was sold earlier that month.
In total, the utility raised $600 million last year, including via peso bonds sold in May and November.
Before the August sale, the utility faced problems borrowing from the offshore market because of widening losses and ballooning debts in recent years. As a result, the government has had to borrow on its behalf until 2004.
Osorio said that based on its unaudited income statement, Napocor posted a "small" profit in 2005 - its first since 1997. She said the net profit was partly due to foreign exchange gains.
Napocor hopes to stay in the black this year, expecting lower interest expense following the government's absorption of two-fifths of its PHP500 billion debt in December 2004, and recent increases in electricity tariffs.
Psalm expects to raise a total of around $2 billion from the sale of all its assets as part of a privatization exercise set to complete at the earliest in the middle of 2008, Osorio said.
The power plants scheduled to be sold this year include the Calaca coal-fired plant, Magat and Pantabangan-Masiway hydroelectric plants and the Tiwi-Makban geothermal plant.
Magat has a capacity of 360 megawatts, Pantabangan-Masiway 112 MW, Tiwi-Makban 700 MW, while Calaca's total capacity is 600 MW.
The Calaca, Pantabangan-Masiway and Tiwi-Makban plants are expected to be offered within the first half of this year, while the Magat facility is set to be auctioned in the third quarter.
Psalm still needs to clarify the regulatory framework governing the transfer of these assets to private hands, but the privatization outlook is better than last year, Osorio said.
Apart from its cleaner balance sheet, Napocor is also benefiting from a marked improvement in investor confidence toward the Philippines. Investors have turned more upbeat since President Gloria Macapagal Arroyo survived an opposition attempt in September to impeach her. Political stability has helped the country's economy and finances, leading to a better credit rating outlook.
-By Ditas Lopez, Dow Jones Newswires; 632-848-5051; ditas.lopez@dowjones.com
-Edited by Cris Larano and Lim Mui Khi
posted by philpower @ 10:46 AM,
