Oil company Phoenix Petroleum Philippines Inc. (PSE: PNX) has raised PhP7 billion through the listing of commercial papers on the Philippine Dealing and Exchange Corp. on December 27, 2018. This serves as the maiden series of the company’s PhP10 billion commercial papers program which will be issued and reissued over a three-year period–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 (SEC).
The initial offer of commercial papers is composed of two subseries amounting to PhP3.5 billion each: Series A-1 has a fixed discount rate of 7.0937% and a tenor of 180 days, while Series A-2 has a fixed discount rate of 7.4717% and a tenor of 360 days.
PNB Capital and Investment Corp. acted as the sole issue manager for the commercial papers program and lead underwriter and sole bookrunner for the initial series.
“We were very pleased with the results of the offer. We received bids of over PhP9 billion for the initial series, which goes to show how strong investor confidence is in Phoenix Petroleum and its future growth prospects,” PNB Capital President and Chief Executive Officer Gerry Valenciano said.
Phoenix Petroleum initially filed its registration statement for the commercial papers program and the initial series with the SEC on October 17, 2018. The SEC rendered the registration statement and issued the permit to sell on December 18, 2018, allowing Phoenix Petroleum to issue and reissue PhP10 billion worth of commercial papers over a three-year period pursuant to Rule 220.127.116.11 of the 2015 SRCIRR.
“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 PhP10 billion,” Phoenix Petroleum Chief Financial Officer Ma. Concepcion F. de Claro said at the listing ceremonies.
This serves as a landmark transaction as it is the first commercial papers issuance under the new SRC IRR rule, providing a significant improvement over the usual shelf registration process. Provided that the total amount of commercial papers outstanding at any time does not exceed the amount of its program, Phoenix Petroleum will be able to reissue commercial papers without having to file for a new permit to sell.
“As the need arises, Phoenix Petroleum has the flexibility to tap the capital markets for its working capital requirements. The entire process has been streamlined since the registration statement and permit to sell issued by the SEC are valid for three years,” Valenciano added.