Phoenix Pet sells P2-B STCPs

MANILA, Philippines - Phoenix Petroleum Philippines Inc. has successfully raised P2 billion from the sale of short-term commercial papers, the company told the Philippine Stock Exchange yesterday.

Strong demand from investors marked the sale, with the offering oversubscribed by almost two times, the oil firm said.

Phoenix tapped AB Capital & Investment Corp. and Multinational Investment Bancorporation as underwriters, which offered the notes to investors from Oct. 14 to 17. The issue date is on Oct. 24.

In its disclosure, Phoenix said proceeds of the sale would be used for working capital.

The papers will be listed at the Philippine Dealing & Exchange Corp. (PDEx).

PDEx said the new paper is envisioned to expand the list of tradable asset classes to cater to issuers of short-term debt. Listing short-term commercial papers alongside bonds in the organized market will afford corporate issuers the flexibility to access short or long-term funding supported by the same established secondary market infrastructure. For investors, the program shall also provide price transparency and liquidity for these instruments as alternative fixed-income investment options.”

Philippine Rating Services Corp. (PhilRatings), a local debt watcher, has assigned an issue credit rating of PRS 2 (minus) to the debt paper.

According to PhilRatings, obligations rated PRS 2 exhibit above average or strong capability for payment of both interest and principal.

“This is normally evidenced by many characteristics of a PRS 1 rating but to a lesser degree. Earning trends and coverage ratios, while sound, will be more subject to variations. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is also maintained by the company. A plus or a minus sign can be added to further qualify an assigned rating,” PhilRatings said.

In assigning the ratings, the debt watcher said it took into consideration Phoenix Petroleum’s consistently improving revenue base and adequate liquidity and financial flexibility, its aggressive network expansion resulting in market leadership in the independent players sector, and its competent and experienced management team.

Phoenix Petroleum, which started in 2005, is the country’s fourth largest and fastest growing independent oil company with a total of 405 stations as of June 30, 2014. It is engaged in the business of trading refined petroleum products, lubricants, and other chemical products on a wholesale basis, operation of oil depots and storage facilities, and allied services nationwide.