Moody's raises outlook for PSALM, Napocor

Global debt watcher Moody's Investors Service has changed its "stable" outlook to "positive" for the Power Sector Assets and Liabilities Management Corp. (PSALM) and National Power Corp.'s (Napocor) "Ba3" senior unsecured bond ratings. "All debt issued by PSALM is unconditionally and irrevocably guaranteed by the government. As such, PSALM's rating is closely integrated with, and strongly linked to, the government's credit quality," Moody's analyst Jennifer Wong said in a statement. PSALM — mandated by law to restructure and reform the Philippine power sector — is an "extension of the government," Wong pointed out. Meanwhile, Napocor's bond rating was assigned by evaluating factors such as "business risk and competitive position of the company versus others within its industry, the capital structure and financial risk of the company, the projected performance of the company over the near to intermediate term, and management's track record and tolerance for risk." The last rating action on Napocor — the principal supplier of off-grid electricity in the Philippines — was taken on July 23, 2009, when the rating was upgraded to "Ba3" from "B1," in line with the sovereign upgrade. On the other hand, the last rating action on PSALM was on Nov. 16, 2009, when Moody's assigned a "Ba3" senior unsecured rating with a stable outlook to the US dollar bonds maturing in 2024. -- JE/OMG, GMANews.TV