PHOENIX Petroleum Philippines, Inc. was assigned a PRS Aa minus (corp.) rating for its planned issuance of commercial papers with P7 billion, according to a local debt watcher.
Philippine Ratings Services Corp. (Philratings) said in a statement that the company has a strong capacity to meet its financial obligations, compared to that of other local firms. The rating is one notch lower than the highest score on Philratings’ credit rating scale.
The rating also carries a stable outlook, indicating that it is likely to remain unchanged in the next 12 months.
Philratings took into account Phoenix Petroleum’s growth and leadership among independent oil players, the expansion of complementary business ventures, and improving sales volume in coming up with the rating. This could however be offset by rising costs, expenses, and finance charges.
The commercial papers are part of Phoenix Petroleum’s shelf registration up to P10 billion in the next three years. Phoenix named PNB Capital and Investment Corp. as the sole issue manager, lead underwriter, and sole bookrunner for the issuance.
About P4.9 billion of the proceeds will be used for the importation of fuels and lubricants. The balance will be for the repayment of short-term loans with BDO Unibank, Inc., Asia United Bank Corp., Robinsons Bank Corp., United Coconut Planters Bank, and Development Bank of the Philippines, which are due in December.
The company said it is the fourth biggest oil player in the country with a 7.1% market share. By end-September, the firm operated a total of 558 retail stations, compared to 530 in the same period last year.
Phoenix Petroleum reported a net income attributable to the parent of P1.17 billion in the first nine months of 2018, 9% lower due to higher cost of sales and services, and higher finance costs due to additional debt to fund its expansion. This came even as revenues doubled to P64.96 billion during the same period. — Arra B. Francia
