Petron to sell $550 million senior notes

MANILA, Philippines — Petron Corp. is selling $550 million worth of senior perpetual capital securities within the month to repay debt and fund corporate programs.

In the final offering circular disclosed to the Philippine Stock Exchange yesterday, Petron said the securities would have an initial rate of distribution of 5.95 percent per annum until April 19, 2026, payable semi-annually in arrears on April 19 and Oct. 19.

Beyond 2026, the securities will have a step-up rate of 2.5 percent per annum.

The securities will be sold in other jurisdictions, including the United Kingdom, Singapore, Hong Kong, Japan and the Philippines, and will be listed on the Singapore Exchange Securities Trading Ltd. (SGX-ST).

Deducting commissions, Petron will raise around $547.8 million, which will be applied “for the repayment of indebtedness and for general corporate purposes.”

As of end-2020, Petron’s total liabilities amounted to P263.53 billion comprising P149.07 billion in current liabilities and P114.46 billion in non-current liabilities.

Petron has tapped Hongkong and Shanghai Banking Corp. Ltd. (HSBC) as sole global coordinator. Meanwhile, the joint lead managers and joint bookrunners are DBS Bank Ltd., HSBC, MUFG Securities Asia Ltd., SMBC Nikko Capital Markets Ltd., Standard Chartered Bank and UBS AG Singapore Branch.

It also hired BDO Capital & Investment Corp., China Bank Capital Corp., and PNB Capital and Investment Corp. as domestic lead managers.

Meanwhile, the company expects to resume operations of its Bataan refinery in May.

Petron’s 180,000 barrels per day refinery – the only remaining refining facility in the country – produces high-value petroleum products and petrochemicals capable of supplying 40 percent of domestic demand.

It was shut down in May last year to give way to maintenance activities on major process units and to mitigate the impact of low fuel demand and poor refining margins. It resumed operations in October.