FITCH Ratings, the London-based international debt watcher, has affirmed its ratings on the Power Sector Assets and Liabilities Management Corp.’s (PSALM) $500-million fixed-rates notes.
PSALM is the agency tasked to privatize and handle the state-owned power assets, including those of power-generation firm National Power Corp. (Napocor).
In a statement, Fitch said it affirmed the $500-million fixed-rate notes due November 2016 at “BBB-” and revised the outlook 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 the Philippines.”
The rating action follows the revision of the Outlook on the Philippines’s Long-Term Foreign-Currency Issuer Default Rating of ‘BBB-’ to Positive from Stable on September 24, 2015,” it said.
It added that changes to the Philippines’s rating will result in a corresponding action on the notes’ rating.
Napocor President Gladys Cruz-Sta. Rita said Fitch requested it to submit a report on its results of operation and financial position for reference in its review of credit standing of the Napocor and PSALM. “Napocor was invited to participate in the discussion being the original owners of assets and liabilities which were transferred to PSALM by virtue of the Epira [Electric Power Industry Reform Act] Law,” Sta. Rita said.
PSALM, through Napocor, issued these notes in 2006 to refinance Napocor’s maturing loans at that time. In 2014 the Napocor realized a net income of P1.536 billion. This was 204 percent higher than 2013’s P505-million net income.