Sat, Mar 14, 2009 - Page 12 News List

Taipower issues nearly NT$7bn in corporate bonds

By Elizabeth Tchii  /  STAFF REPORTER

Taiwan Power Co (Taipower, 台電) auctioned NT$6.99 billion (US$202.36 million) in corporate bonds yesterday as part of the company’s annual fundraising effort to maintain its power grid.

The auction helped lock the yields on the bonds, which will be divided into two tranches and sold to the public sometime next month, a Taipower official told the Taipei Times by telephone yesterday.

POWER DEVELOPMENT

“Typically, Taipower needs about NT$150 billion to NT$160 billion in capital every year just to support daily power development,” public relations representative Clint Chou (周義岳) said.

Taipower usually borrows directly from foreign banks or issues corporate bonds to raise capital, Chou said.

The company raised a total of NT$50 billion to NT$60 billion through corporate bonds last year, he said.

Based on results of the auction, the state-run utility will issue NT$3.89 billion in five-year bonds with a yield of 1.61 percent. Interest payments will be made annually. The principal amount will be repaid 50 percent in the fourth year after issuance and 50 percent in the fifth year.

PAYMENT

Additionally, the yield for the NT$3.1 billion in seven-year bonds was set at 1.8 percent. The interest will be paid annually, while the principal amount will be repaid in its entirety in the final year, Taipower said in a statement.

Chou said the power network was basically the supply of electricity necessary to meet consumer demand.

The complex process starts from power plants, transmission lines and extra-high voltage sub-stations and extends to distribution sub-stations before electricity reaches end-users, he said.

GUARANTORS

For this bond issuance, Cathay United Bank (國泰世華銀行) and Mega International Commercial Bank Co (兆豐國際商銀) are the guarantors, while KGI Securities Co Ltd (凱基證券) is acting as the lead underwriter.

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