Petron’s bond offer gets triple ‘A’ rating

Petron Corp. has obtained sterling credit rating for a proposed P20-billion fresh bond offering.

Credit watchdog Philippine Rating Services Corp. (PhilRatings) has assigned a triple “A” or PRS Aaa rating with a “stable” outlook on Petron’s upcoming fixed-rate bond offer, the last tranche of the firm’s three-year shelf registration of up to P40 billion.

Debt paper rated “PRS Aaa” are deemed of the “highest quality with minimal credit risk.” The borrower’s capacity to meet its financial commitment on the obligation is deemed “extremely strong.”

A “stable” outlook means the rating is likely to remain unchanged in the next 12 months.

Proceeds from this bond offering will be used by Petron to refinance debt.

In a statement, PhilRatings said it had taken into account the following factors in assigning the rating for Petron’s proposed bonds:

-growing sales volume, supported by the continued expansion in the distribution network

-consistent ranking among the top three players in the retail fuel market, both in the Philippines and Malaysia

-sound business strategy and experienced management

-healthy economic outlook and an inelastic demand for fuel that tempers the impact of crude price volatilities and regulatory risks.

Petron operates the largest petroleum refinery complex in the Philippines located in Limay, Bataan. The refinery underwent an upgrade to a full conversion refining complex beginning 2010 and began its full commercial operation in January 2016. —DORIS DUMLAO-ABADILLA