Land Bank of the Philippines extended the majority of the P110-billion syndicated loan facility to state-owned Power Sector Assets and Liabilities Management (PSALM) Corp. to strengthen the competitiveness of the local power industry.
LandBank committed to financing P60 billion of the total facility. PSALM will use the proceeds to augment its working capital, refinance existing liabilities and settle domestic contractual obligations.
“LandBank has a long-standing history of supporting the National Government’s electrification initiatives, with our loan portfolio encompassing a wide range of energy-related projects. We will continue to support PSALM in addressing the energy needs of the country today and in the future,” said LandBank president and chief executive Lynette Ortiz.
PSALM president and chief executive Dennis Edward Dela Serna, together with Ortiz and Development Bank of the Philippines (DBP) president and chief executive Michael de Jesus, led the ceremonial signing for the syndicated term loan.
“We express our heartfelt gratitude to LandBank, DBP and OGCC [Office of Government Corporate Counsel] for their continued support in attaining PSALM’s financial objectives. PSALM’s liability management program has presented significant challenges as we strive to fulfill our mandate of liquidating the financial obligations we have assumed. This syndicated loan provides additional financial support to PSALM, ensuring our continued progress and assist our asset management and privatization strategies,” said Dela Serna.
“With this loan, we are projecting a net reduction of P12.9 billion in our financial obligations for CY 2024,” he said.
LandBank and DBP acted as the joint lead arrangers for the syndicated deal, with the DBP-Trust Banking Group as the facility and paying agent, and the OGCC as the transaction counsel.
PSALM is a wholly-owned and controlled government entity mandated under the Electric Power Industry Reform Act (EPIRA) to take over the ownership of all existing generation assets of the National Power Corp. (NPC), independent power producer (IPP) contracts, real estate, and all other disposable assets, including the transmission business of the National Transmission Corp. (TransCo).
The agency also manages the orderly sale and privatization of these assets with the objective of liquidating all of NPC’s financial obligations in an optimal manner.
