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STATE-RUN Power Sector Assets and Liabilities
Management Corp. (Psalm) is mulling over the prepayment of about a
fifth of state-owned National Power Corp.’s (Napocor) foreign
denominated debts within the next six months.
In a briefing, Jose C. Ibazeta,
Psalm president, said the government is planning to prepay $1.3
billion of Napocor’s debts, the bulk of which is yen-denominated,
to take advantage of the strengthening of the peso and lower
interest rates.
”Primarily our debt now is in
Yen and in Dollars and some in Pesos. We want to shift our debt to
primarily peso and dollars. But the yen, it’s our objective to
take it out, because the yen is getting stronger,” Ibazeta said.
The Psalm chief said that the
amount is part of Napocor’s $2.46- billion worth of loans, which
will mature within the next two to four years, and which the company
has the option to settle early.
He said Psalm’s already gave
the green light to refinance or restructure these loans using either
the proceeds from the privatization of Napocor’s power plants,
which is expected to reach $800 million before the year ends, or
fresh borrowings through a combination of prepaying yen loans and
switching some of its dollar obligations to peso. He said Psalm
however has yet to decide on this.
”The plan of refinancing is
targeted to change the profile of the debt of Napocor, because
we’re actually 92-percent forex debt, and we want to shift that to
peso to almost 42 percent,” he added.
Napocor currently has $7 billion
in debts, of which more than half is in dollars, about a third is in
yen and the rest is in peso, euro and won.
Of the total amount, $4.6 billion
will mature starting 2009 until 2011.
Ibazeta said Napocor would no
longer require fresh borrowings, either foreign or local, for this
year. He said its internally generated funds are enough to sustain
its operations for the rest of the year.
Napocor earlier programmed to borrow less than $500 million but it
has yet to exercise this option in light of its improving finances.
--Euan Paulo C. Añonuevo
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