Phoenix Petroleum secures PRS Aa- rating
PHOENIX Petroleum Philippines Inc. was assigned by local debt watcher Philippine Rating Services Corp. (Philratings) a PRS Aa minus (corp.) rating for the issuance of its three-year P10-billion commercial papers (CPS) program.
The rating also included a stable outlook, which meant that it is likely to remain unchanged in the next 12 months.
“The rating was obtained in relation to the oil firm’s outstanding three-year CPS program of up to P10 billion. With this, Phoenix may issue CPS until 2021. The proceeds will be used to finance the company’s working capital requirements,” a statement from Phoenix said Tuesday.
Phoenix said separately that the last tranche of its P10-billion CPS program, which consists of an aggregate principal amount of up to P2 billion with an oversubscription option of up to P1.5 billion, would be issued at a discount rate of 5 percent. The offer period is from July 21 up to July 23.
If fully subscribed at the 5-percent rate, Phoenix expects net proceeds to reach P3,280,015,570. The proceeds would be utilized to finance the importation of fuels and lubricants, among others.
Philratings took into account Phoenix Petroleum’s continued growth and leadership among independent oil players; improving sales volume; expansion of its complimentary business ventures; and declining coverage ratios in relation to debt servicing.
Phoenix was able to increase its number of retail stations from 530 in 2017 to 655 in 2019. For the past three years, the bulk of the growth was in Luzon.
In 2019, the so-called “Big Three” (Petron Corp., Pilipinas Shell Petroleum Corp., and Chevron Philippines) continued to account for the bulk of the market, with a 50.7-percent share.
It is worth noting, however, that over the past years, the aggregate market share of major oil players has been declining. In contrast, the other industry players, together with the endusers, captured 49.3 percent of the market, of which 43.0 percent was accounted for by the share of independent players.
Phoenix leads the independent oil players, with a 7.1-percent share in 2019, making it the fourth biggest of oil players in the Philippines in terms of market share. It should be noted that Phoenix’s market share consistently increased from 4.7 percent in 2015.
Philratings said it also took into consideration the increasing economic uncertainty and the immediate adverse impact of the community quarantine attributable to the Covid-19 pandemic on the company’s business.
“Philratings shall continuously monitor developments relating to Phoenix and may change the rating at any time, should circumstances warrant a change,” it said.