PETRON Corporation (Petron) issued and listed P20 billion worth of fixed-rate retail bonds on Thursday, including a base offer of P15 billion and the oversubscription portion of P5 billion.
The issue “was twice oversubscribed over the base offer and was priced at the tight end of the marketing range,” the oil company said.
This is the first tranche of the oil company’s shelf registration of P40 billion of fixed- rate bonds.
The bonds were listed on the Philippine Dealing & Exchange Corp. (PDEX) on Thursday, Petron’s first listing at the exchange.
“We are very pleased with the outcome of our fund-raising exercise. The success of the transaction underscores Petron’s leadership position in the industry as well as its long-term growth potential,” Petron President and CEO Ramon S. Ang said in a statement.
PhilRatings assigned Petron’s issuance a PRS Aaa, its highest credit rating. Obligations rated PRS Aaa are of the highest quality with minimal credit risk.
The fixed-rate bonds consist of P13-billion Series A Bonds with an interest rate of 4.0032 a year, callable in 5 years, and P7 billion of seven-year Series B Bonds at a yield rate of 4.5219 percent.
Petron said P19.8 billion in net proceeds – after listing and related fees and taxes – will refinance existing debts (P11.31 billion of dollar denominated long-term loans and P5 billion of short-term loan with BDO Unibank Inc.). It will also use P3.49 billion as working capital, primarily to buy crude oil.
At the start of the year, Petron commissioned its $2-billion refinery upgrade to increase its capability to produce high-value fuels and petrochemicals. This is supported by an expanding retail network which now stands at 2,240 service stations – the most extensive in the industry.
“With our strategic investments beginning to bear fruit, we are well-poised to further strengthen our bottom line and sustain our growth momentum. We thank our partner institutions and the investing public for their continued trust and confidence,” Ang said.
BDO Capital & Investment Corporation, BPI Capital Corporation and SB Capital Investment Corporation were the joint Issue managers, lead underwriters and bookrunners for the transaction.
East West Banking Corporation and First Metro Investment Corporation were the co-lead underwriters while PNB Capital and Investment Corporation is the participating underwriter.
Petron Corporation is the largest oil refining and marketing company in the Philippines, and is a leading player in the Malaysian market. It has a combined refining capacity of 268,000 barrels per day and produces a full range of world-class fuels and petrochemicals. It has over 2,850 service stations.