MAJOR oil refiner and distributor Petron Corp. on Thursday announced the yield rates for its P20 billion bond offer, proceeds of which will be used mainly to refinance existing debt.
In its offer supplement, Petron said the Series A bonds will carry a 4.0032-percent annual yield while the Series B bonds will have a 4.5219-percent per annum yield.
Series A will have a tenor of five years due 2021 and Series B will have tenor of seven years due 2023. The base offer is P15 billion with an oversubscription option of P5 billion.
The P20-billion initial tranche is a part of Petron’s planned P40-billion bond offering under shelf registration with the Securities and Exchange Commission (SEC). The remaining P20 billion under shelf registration may be offered to the public within three years.
Petron said net proceeds of P19.8 billion from the first tranche, after listing and offer-related fees and taxes, will be used to refinance existing debt (P11.31 billion in dollar-denominated long-term loans and a short-term loan of P5 billion with BDO Unibank Inc.) and fund working capital requirements (P3.49 billion for the purchase of crude oil).
It said the long-term loans were incurred to finance and establish the $2-billion Bataan refinery master plan 2 (RMP-2) project, which opened in January this year.
The upgraded refinery targets production of 180,000 barrels of fuel per day. The Bataan refinery plant converts Petron’s gasoline and diesel products to Euro-4 compliant standards.
Petron earlier said it planned to build an additional 250 service stations in the Philippines and Malaysia within 2016. To date, there are 2,800 Petron stations in the two countries.
The company also plans to put up 12 service stations along the 88.85-kilometer Tarlac-Pangasinan-La Union Expressway, upgrade its Port Dickson refinery in Malaysia, and rebrand Exxon Mobil stations also in Malaysia.
Petron is the listed oil refiner and distributor arm of conglomerate San Miguel Corp.