Petron raises P18 billion from bonds

MANILA, Philippines — Petron Corp., the country’s only oil refiner, has raised P18 billion from the issuance of the first tranche of its peso fixed rate bonds.

In a disclosure to the Philippine Stock Exchange yesterday, Petron said the offer, consisting of Series E bonds due 2025 and Series F Bonds due 2027 were fully subscribed.

Under the Series E Bonds, the oil firm sold P8.76 billion to retail investors and P241 million to institutional investors.

Meanwhile, Petron sold P8.44 billion to retail investors and P560.6 billion to institutional investors under the Series F Bonds.

The Series E Bonds have a fixed interest rate of 3.4408 percent per annum, while the Series F Bonds have a fixed interest rate of 4.3368 percent per year.

The bonds, which form part of the P50-billion shelf registration filed with the Securities and Exchange Commission (SEC), will be listed on the Philippine Dealing & Exchange Corp. (PDex).

Net proceeds, estimated at P17.78 billion, will be used to redeem the company’s Series A Bonds, partially finance a power plant project, and pay existing debt.

Petron said the P13-billion Series A Bonds issued in 2016, would mature on Oct. 27.

Meanwhile, the oil company is raising the capacity of its existing power plant in the Bataan refinery from 140 megawatts to 184 MW to “generate power and steam required by the refinery, utilizing cheaper feedstock (petcoke) in lieu of more expensive fuel oil.”

Estimated to cost as much as P12 billion, the project is expected to start construction in the fourth quarter and is targeted to be completed in the second half of next year. Of the P12 billion, P3.3 billion will be funded from the proceeds of the bond offer, while the remaining P7.7 billion to P8.7 billion will be financed by internally generated funds.

Petron has P1.48 billion “existing indebtedness, specifically amortizations of various peso bilateral long-term facilities.”

The company is scheduled to pay P535.71 million to BDO Unibank Inc. on Oct. 25, P312.50 million and P625 million to Bank of the Philippine Islands on Oct. 27 and Dec. 29, respectively, and P250 million to Union Bank of the Philippines on Oct. 13.

The bonds were rated PRS Aaa, with a Stable Outlook, by PhilRatings. PRS Aaa is the highest rating assigned by PhilRatings.