Petron to issue US$550-M senior perpetual bonds

Published April 13, 2021, 5:10 PM

by Myrna M. Velasco

Leading oil firm Petron Corporation will be tapping the capital market for fresh round of US$550 million worth of senior perpetual securities issuance, the proceeds of which will be used for the company’s settlement of financial obligations falling due and to fund operations as well as programmed projects.

Tapped as sole global coordinator has been HSBC; while joint lead managers and joint bookrunners for the issue would be DBS Bank; HSBC; MUFG; SMBC Nikko; Standard Chartered Bank and UBS.

The domestic lead managers are BDO Capital & Investment Corporation, China Bank Capital Corporation and PNB Capital and Investment Corporation.

The securities issuance, which is slated on April 19 this year, had been in “registered form in amounts of US$200,000 and in integral multiples of US$1,000,” according to the oil firm.

Petron emphasized that “the net proceeds from the issue of the securities, which will be approximately US$547.8 million (after the deduction of commissions), will be applied by the company for the repayment of indebtedness and for general corporate purpose.”

According to the terms, the initial rate of distribution of the securities had been set at 5.95-percent per annum plus any increase under conditions 4.4, which refers to: a) the date on which a reference security default event occurs; and b) the date which is the 61st day — or if such day is not a business day, it shall be reckoned on the first business day thereafter.

Petron is the country’s biggest oil firm and it is the only player in the deregulated downstream oil sector that has opted to sustain the operation of its refining facility in Limay, Bataan.

Like its rival-firms in the industry, the company was also barreled with huge financial losses last year – at the scale of more than P11.0 billion; but it is similarly targeting rebound on its sales and financial performance next year.

Petron President Ramon S. Ang previously told media that the oil firm may still log losses this year, but it is with expectation that it will be substantially trimmed from what was posted at its bottom line in 2020.

Despite the rigid restrictions enforced this year because of the recurrence of escalating Covid-19 infections, the transport sector was not as shackled compared to the lockdowns last year – when public transport had been entirely grounded to a halt.

Nevertheless, given that travel restrictions are still heavily enforced, the oil firm noted that sales recovery would still be gloomy this 2021, hence, it is leaning on possible brighter prospects next year.