Napocor raises P10B in bond auction

State-owned National Power Corp. (Napocor) raised P10 billion after investors snapped up its five- and 10-year fixed rate treasury bonds. Power Sector Assets and Liabilities Management Corp. (PSALM) president Nieves Osorio told reporters after Friday’s auction that Napocor got better than expected yields for both the five-year bonds due 2011 and the 10-year bonds due 2016. The auction, which capped Napocor's fund-raising activities this year, was three times oversubscribed as tenders for both tenors amounted to P24.04 billion for the P6 billion issuance. The five-year bonds fetched 5.25 percent as tenders amounted to P14.749 billion or almost four times oversubscribed while the 10-year bonds fetched 5.875 percent as offers reached P9.294 billion or more than three times oversubscribed. Due to the oversubscription, the auction committee decided to accept P3.68 billion instead of only P3 billion for the five-year bonds and P6.32 billion instead of only P3 billion for the 10-year bonds. Osorio said proceeds would be used to finance Napocor’s deficit and capital expenditures. The Psalm president added that Napocor has completed its borrowing activities for the year where it intended to raise between $500 million and $700 million to finance its maturing debt obligations, capital expenditures, and other funding requirements. Napocor also raised $500 million from the sale of 10-year offshore bonds last October. The global bonds due 2016 fetched 6.875 percent. About $500 million of the total outstanding obligations of Napocor are due this year. Last year, Napocor raised $600 million of which $400 million came from the international bond market while $200 million were sourced from the domestic bond market. It successfully floated P11 billion worth of zero-coupon bonds due 2012 in November of last year and another P5 billion through the issuance of five- and three-year "power bonds" in May of last year. Osorio, also former undersecretary of the Department of Finance (DOF), said Napocor has yet to finalize its borrowing requirement for next year. Napocor registered a net income of P16 million last year, which a complete reversal from its P29.9 billion net loss in 2004. It had been posting net losses since 1998 when its deficit peaked at P117 billion. -GMANews.TV