Land Bank of the Philippines (LANDBANK) has extended the majority of a ₱110-billion syndicated loan facility to the state-owned Power Sector Assets and Liabilities Management (PSALM) Corporation.
LANDBANK committed to financing ₱60 billion of the total loan. The proceeds will be used by PSALM to augment working capital, refinance existing liabilities, and settle domestic contractual obligations.
“LANDBANK has a long 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 CEO Lynette V. Ortiz.
PSALM President and CEO Dennis Edward A. Dela Serna, along with LANDBANK President Ortiz and Development Bank of the Philippines (DBP) President and CEO Michael O. de Jesus, led the ceremonial signing for the ₱110-billion syndicated term loan facility on July 30, 2024, in Quezon City. Assistant Government Corporate Counsel Judge Basilia Serrano-Angeles witnessed the event.
“We express our heartfelt gratitude to LANDBANK, DBP, and OGCC for their continued support in achieving PSALM’s financial objectives. PSALM’s liability management program has faced significant challenges as we strive to fulfill our mandate of liquidating financial obligations. This syndicated loan provides additional financial support to PSALM, ensuring our continued progress and aiding our asset management and privatization strategies,” said PSALM President Dela Serna.
“With this loan, we project a net reduction of ₱12.9 billion in our financial obligations for 2024,” he added.
LANDBANK and DBP acted as Joint Lead Arrangers for the syndicated deal, with the DBP – Trust Banking Group serving as the Facility and Paying Agent, and the Office of the Government Corporate Counsel (OGCC) as the Transaction Counsel.
PSALM is a wholly-owned government entity mandated under the Electric Power Industry Reform Act (EPIRA) to take ownership of all existing generation assets of the National Power Corporation (NPC), independent power producer contracts, real estate, and all other disposable assets, including the transmission business of the National Transmission Corporation (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.
LANDBANK has been a steadfast partner of PSALM since 2008, providing essential financing to support its mandate under the EPIRA law. The bank continues to serve the development needs of the energy sector, including other industry players such as large oil companies, power producers, and distribution utilities.
