Moody’s upgrades Psalm to Baa2

Moody's Investors Service said it upgraded the issuer and senior unsecured bond ratings of Power Sector Assets & Liabilities Management Corp. (Psalm) to Baa2 from Baa3.

The outlook is stable.

The action follows Moody's Dec. 11 decision to upgrade the Philippine government's long-term foreign-currency and local-currency ratings to Baa2 with a stable outlook.

"Psalm's ratings are underpinned by its distinct policy role and close integration with the government," Moody's vice president and senior analyst Mic Kang said in a news release.

Its policy role is to restructure and reform the Philippine power sector. In addition, Moody’s said the government is obligated to assume any remaining assets and liabilities at the end of Psalm's 25-year corporate life.

"The government's strong commitment to Psalm will likely remain intact, given its unconditional and irrevocable guarantees for debt issued by Psalm and transferred from National Power Corp.," Kang added in the release.

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