Petron Corp., the country’s second largest corporation in 2017 by gross revenue, is offering the last two tranches of its fixed-rate bonds worth Php20 billion.
Petron’s Series C and D have annual interest rates of 7.8183 percent and 8.0551 percent, respectively. Series C will mature on April 19, 2024, while Series D will mature on October 19, 2025. These two tranches are the remaining of the Php40-billion shelf-registration series that the company first offered in 2016.
The offer period started on October 8, Monday, and will last until October 12, Friday. The issue date is scheduled on October 19, Friday.
The company requires a minimum investment of Php50,000 and additional placements can be made in increments of Php10,000. Proceeds will be used for refinancing existing debts and for general corporate funding purposes, the company said.
PhilRatings rated Petron’s bonds “PRS Aaa,” which means that the company has a “very strong capacity to meet its financial commitments relative to that of other Philippine corporates.”
The rates of Petron’s bonds are remarkably higher than the coupon rates on seven-year government-offered fixed-rate treasury bonds, which fetched a yield of 5.750 percent as of the last week of September, according to the Bangko Sentral ng Pilipinas.
Petron’s rates are also higher than the September inflation rate, which stood at a nine-year high of 6.7 percent in August. The surge in consumer prices prompted the central bank to raise interest rates on the last week of September, which may explain the bonds’ higher rates.
Interested investors are advised to read the company’s prospectus, which is available on its website. BDO Capital, BPI Capital and China Bank Capital are the joint lead bookrunners and underwriters of the offering.
Petron registered a 30.2-percent increase in profits last year from Php10.82 billion in 2016 to Php14.09 billion in 2017. Likewise, its gross sales jumped by 13.1 percent from Php37.7 billion to Php42.7 last year.
Pauline Macaraeg is Entrepreneur PH's data journalist