• Fitch revises PSALM notes’ outlook to positive from stable


    Debt-watcher Fitch Ratings has revised the outlook on the debt notes of state-run Power Sector Assets and Liabilities Management Corp. (PSALM) to “positive” from “stable.”

    Fitch also affirmed the BBB- rating on the $500-million fixed-rate notes of PSALM due November 2016. The rating represents the minimum investment grade.

    “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 on Wednesday.

    With the revision of the outlook on the Philippines’ long-term foreign-currency issuer to positive from stable , the default rating of ‘BBB-’ was also maintained on September 24.

    Fitch said changes to the country’s rating will result in a corresponding action on PSALM’s notes.

    “No third party due diligence was provided or reviewed in relation to this rating action,” Fitch noted.

    PSALM is the government agency tasked to privatize and handle the power assets of the National Power Corp. (Napocor).

    Napocor issued the notes in 2006 to refinance its maturing obligations.

    According to data from PSALM, Napocor’s outstanding financial obligations amount to $16.63 billion as of October 2011.

    Roughly 20 percent of Napocor’s assets are set to be privatized by PSALM.

    PSALM is also set to sell this year the 210-MW Steag State Power Inc. coal-fired power plant in Misamis Oriental.

    Another asset up for privatization is the contracted capacity of the 140-MW Casecnan hydropower plant, which is part of the Casecnan Multipurpose Project, a combined irrigation and hydroelectric project of the government.

    From the assets that are lined up for privatization up to 2017, PSALM expects to raise $3.2 billion to $3.4 billion.


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