Philippines Capital Markets Deal: Petron’s US$475m perpetual bond
In September, oil refiner Petron came to the US dollar market to address an upcoming call date for its US$550m 5.95% perpetual bonds. It tackled the outstanding notes by launching a tender and exchange offer alongside a new US$475m 7.35% senior perpetual non-call three-year bond.
The syndicate team of HSBC as sole global coordinator, DBS, Mizuho, MUFG, SMBC Nikko, Standard Chartered and UBS as lead managers and bookrunners, and BDO Capital & Investment Corp, Chinabank Capital Corp and PNB Capital and Investment Corp as domestic lead managers, built a hugely oversubscribed book, which reached US$3.2bn at reoffer.
A strong window ahead of an anticipated US rate cut set the transaction up for success, with the bond achieving the tightest yield on a perpetual out of the Philippines since October 2021.
The notes were priced at the minimum yield that was announced on September 8, inside the initial guidance of 7.6% area, and traded up to 103 the day after pricing.
New money accounted for US$141.81m of the issue. The rest of the notes were issued in exchange for tendered notes.
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