Philippines' Psalm accepts tenders for $584.80 million Napocor bonds

New York, Nov. 25 - Power Sector Assets and Liabilities Management Corp. said it accepted tenders for $584.80 million of the $500 million of 9 7/8% guaranteed notes due 2010, $700 million of zero-coupon guaranteed bonds due 2010 and $400 million of guaranteed floating-rate notes due 2011 originally issued by National Power Corp., according to a Psalm news release.

Psalm accepted $321,862,000 of the 9 7/8% notes, leaving $178,138,000 outstanding. It will issue $322,129,000 of new global bonds due 2024 and $14,817,000 of new global bonds due 2019 in exchange for these notes.

Palm accepted $255,470,000 of the zero-coupon bonds, leaving $444,530,000 outstanding. In exchange it will issue $248,970,000 of the 2024 global bonds and $6,169,000 of the 2019 globals.

Palm also accepted $7,467,000 of the floating-rate bonds, leaving $392,533,000. It will issue $7,915,000 of the 2024 global bonds and no 2019 globals.

Settlement is scheduled for Dec. 2.

Psalm announced the exchange offer on Nov. 16, saying it would accept the 9 7/8% bonds first, followed by the zero-coupon bonds and finally the floating-rate bonds.

In exchange for their bonds, holders could choose to receive newly issued dollar-denominated guaranteed global bonds due 2024 or reopened dollar-denominated guaranteed global bonds due 2019. Both series are guaranteed by the Republic of the Philippines.

The coupon for the 2024 bonds will equal the sum of a spread plus the interest rate calculated as the interpolated average between the yield to maturity as of 5 p.m. ET on the pricing date of the 10 5/8% bonds due March 2025 issued by the Philippines and the yield to maturity as of 5 p.m. ET on the pricing date of the 9½% bonds due October 2024 issued by the Philippines.

The spread will be 90 to 115 basis points, and the pricing date was Nov. 23.

For holders who elect to receive 2024 bonds, the exchange ratio is 1.04935 for 9 7/8% notes, 1.00000 for zero-coupon notes and 1.06116 for floaters.

For holders who elect to receive 2019 bonds, the exchange ratio is 0.996051 for 9 7/8% notes, 0.940208 for zero-coupon notes and 1.007261 for floaters.

The exchange ratios for the 9 7/8% notes and floaters include accrued interest, and the company noted that the exchange ratios for the floaters may change as a result of the interest rate reset due to occur on Nov. 19.

In order to be eligible to participate, a holder must submit a principal amount of notes that would result in the issuance of at least $100,000 of new bonds.

No more than $600 million of bonds will be issued in the exchange offer. If the amount of bonds issuable would exceed this cap, Psalm will accept tenders by order of acceptance priority level, and within each level of priority, notes to be exchanged for 2024 bonds will be accepted before notes to be exchanged for 2019 bonds. Psalm will then accept tenders of the lowest priority series that is accepted in the offer on a pro rata basis.

The exchange offer expired at 5 p.m. ET on Nov. 24.

The company plans to offer up to $600 million of the 2024 bonds for cash. The exchange offer is conditioned on the pricing and settlement of this offering.

Psalm said approval in principle has been received for the listing of the 2024 bonds on the Singapore Exchange Securities Trading Ltd.

Development Bank of the Philippines, Morgan Stanley & Co. International plc and UBS AG are the managers and bookrunners for the 2024 bonds offering. The information agent is Thomson Reuters (call Melina Bobbio at +44 0 207 542 9013, Christina Mermiga at +44 0 207 542 5836, Ellis Farrell at +44 0 207 542 8775 or Rachel Paunlagui or Denis Supe at +63 2 814 4534).

Psalm is a Manila-based government-run power company.

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