Phoenix Petroleum Philippines Inc. plans to offer commercial paper worth P3.5 billion.
Phoenix said in a disclosure to the Philippine Stock Exchange the CPs would have a tenor of 360 days from the issue date tentatively scheduled on August 5. It tapped PNB Capital and Investment Corp. as the arranger of the offering.
Net proceeds of the offer, assuming a final discount rate of 7.5 percent and it is fully subscribed, is expected to reach P3.216 billion.
“The expected net proceeds of the offer are intended to be used to refinance existing short-term loans of the corporation, which were used to finance working capital requirements in relation to the regular importation of fuels and lubricants by the corporation,” Phoenix said.
The final issue price on the discount rate will be pegged on July 26.
Phoenix earlier raised P7 billion from the issuance of Series A commercial paper in December.
The issue served as the maiden series of the company’s P10-billion commercial paper program, which it will issue and re-issue over a three-year period. The issue is a milestone in the debt securities market as it is the first program of its kind to be approved by the Securities and Exchange Commission.
The initial offer of commercial papers is composed of two sub-series amounting to P3.5 billion each. Series A-1 has a fixed discount rate of 7.0937 percent and a tenor of 180 days, while Series A-2 has a fixed discount rate of 7.4717 percent and a tenor of 360 days.
Series A commercial papers matured in June 25 and has been repaid by the company.
With the repayment, Phoenix’s remaining balance from commercial paper program stands at P6.5 billion.
“Phoenix Petroleum has long recognized the role of the financial markets as a vital and dynamic source of funding for our initiatives. This is why, today, we mark another milestone with the biggest issuance of commercial papers at P10 billion,” Phoenix Petroleum chief finance officer Ma. Concepcion de Clasro said earlier.
Phoenix is one of the country’s most aggressive oil companies today, venturing into liquefied petroleum gas, bitumen, convenience store retailing business and most recently, liquefied natural gas.