Napocor mulls $250-M bond float

The National Power Corp. (Napocor) is planning to issue some $250-million worth of bonds in the international market in the first quarter of 2004 to partly pay its maturing obligations and finance its operating expenses for next year.

Napocor senior finance department manager Lorna Dy said the Power Sector Assets and Liabilities Management (PSALM) is in talks with ING Barings to lead manage the float.

Dy said the proposed bond issue would make up part of the proposed financing requirements of the state-owned power firm.

"We need to put in place a good financing plan before election time. The plan will include the borrowing and financial needs of the company. We need a proper perspective of our finances," she added.

Napocor will need at least $1 billion for debt service and another $1 billion as payments for the amortization of the capacity fees to its independent power producers (IPPs) for 2004.

PSALM president Edgardo del Fonso said Napocor normally sets aside $1 billion for debt servicing every year. Of this amount, $500 million will be for principal and another $500 million for interest.

For this year, he said Napocor’s maturing obligations will amount to nearly $500 million. Some of these maturing debts are bonds which were issued by the power firm over the past years.

As of end-June 2003, Napocor has approximately $7- billion worth of debts, $800 million more than the $6.2 billion incurred in end-2001 but slightly lower than the $7.2 billion recorded in end-2002.

But the $7-billion debt excludes the $250 million loan which was partly-backed by the Overseas Private Investment Corp. of the US finalized a few weeks ago. – Donnabelle Gatdula