Mon, Jul 09, 2018 - Page 16 News List

Taipower to use NT$15.5bn bond issue for upgrades

HEALTHY APPETITE:The state-owned utility is to issue seven and 10-year bonds at lower yields than before, hinting at higher interest in the bonds among investors

By Chen Cheng-hui  /  Staff reporter

Taiwan Power Co (Taipower, 台電) plans to sell NT$15.5 billion (US$508.2 million) of unsecured corporate bonds at an auction next month, marking the state-run utility’s second bond sale this year after selling NT$18 billion of bonds in May.

Taipower aims to use the bond sale to fund capital spending on upgrades to power generation facilities in Kaohsiung’s Dalin District (大林) and New Taipei City’s Linkou District (林口), the company said on Friday last week.

Taipower is the largest issuer of corporate bonds in Taiwan, with its outstanding bond issues accounting for 21 percent of the nation’s total corporate bonds at the end of last year, according to S&P Global Ratings. Therefore, the yields on its bonds are the most important pricing indicator in the nation’s corporate bond market.

In a statement posted on its Web site, the company said that the new bonds include NT$4.6 billion in five-year bonds, NT$5.6 billion in seven-year bonds and NT$5.3 billion in 10-year bonds.

Based on feedback it received from interested parties, the company said it proposes to pay a yield of 0.84 percent on the five-year bonds, 0.94 percent on the seven-year bonds and 1.09 percent on the 10-year bonds.

While the yield on the five-year bonds has not changed, the yields on this issue of seven and 10-year bonds are lower than in previous issues, reflecting heightened interest among local institutions.

The bonds are to be repaid in a lump sum at maturity, Taipower said, adding that the issuance still needs approval from the Taipei Exchange, which operates the nation’s bond market.

Separately, Taipower is today to present a five-year, NT$15 billion program to bolster its electricity distribution system to the Ministry of Economic Affairs, after more than 20 power interruptions were reported over the past two months that have raised concern about potential power shortages this summer.

Under the program, the company plans to inspect and improve all its power cables, switches, connectors and transformers, it said.

If approved by the ministry, the company is to start the program this month at the earliest, it added.

Meanwhile, Taipower said that the No. 2 reactor at the Guosheng Nuclear Power Plant in New Taipei City’s Wanli District (萬里) resumed operations at 2:18pm on Saturday after being taken offline earlier that day for a safety inspection.

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