Petron raising $500 M worth of new capital securities

Leading oil firm Petron Corporation is tapping the capital market again on its offer of new $500 million worth of senior perpetual capital securities, proceeds of which will be primarily used for debt refinancing and the rest to bankroll capital expenditures.

In its offer notice that was submitted to the Philippine Stock Exchange (PSE), the oil firm noted that “the securities are issued in registered form in denomination of US$200,000 and integral multiples of US$1,000 in excess thereof.”

It added that the expected closing date of the offer will be January 18, this year; and the securities will have a term of five years or until July 19, 2023.

It will carry an interest of 4.6 per annum, but on a reset date after five years, interest charges will be enforced with 2.5 percent increase per annum.

The oil firm added that the credit facility will be “payable semi-annually in arrears of January 19 and July 19 of each year, commencing on July 19, 2018.”

Petron noted that “the net proceeds from the issue of the securities will be approximately US$498 million.”

The oil firm stressed that this will be applied “for the repurchase, refinancing and/or redemption of undated subordinated capital securities, the repayment of indebtedness and for general corporate purposes, including capital expenditures.”

It must be culled that Petron recently sent out tender notice on planned repurchase of a fraction of its $750-million subordinated capital securities – which could be up to the level of $350 million.

In both transactions, Petron has engaged the Hongkong and Shanghai Banking Corporation Limited-Singapore Branch as the sole global coordinator; and D.F. King Limited as the information and tender agent.

The designated joint dealer managers are Australia and New Zealand Banking Group Ltd., DBS Bank Ltd., Deutsche Bank AG-Singapore Branch, Standard Chartered Bank and UBS AG-Singapore Branch.