PETALING JAYA: Petroliam Nasional Bhd (PETRONAS) has returned to the international US dollar bond market after four years, raising US$5bil through a three-tranche bond issuance, with proceeds earmarked for “general corporate purposes”.
This marks the largest oil and gas bond issuance out of Asia since PETRONAS' US$6bil transaction in 2020 and the largest international bond offering from the region since 2021.
The issuance consists of US$1.6bil in 5.75-year senior notes, US$1.8bil in 10-year senior notes, and US$1.6bil in 30-year senior notes.
The 5.75-year notes were issued with a coupon rate of 4.95%, priced 90 basis points above the five-year US Treasury yield.
The 10-year notes carry a coupon rate of 5.34%, priced 100 basis points above the 10-year US Treasury yield, while the 30-year notes offer a coupon rate of 5.848%, priced 115 basis points above the 30-year US Treasury yield.
The national oil company said in a statement that the transaction was “well-received” by investors, attracting a peak orderbook of over US$17bil, representing an oversubscription of 3.4 times
“Overwhelming investor interest enabled PETRONAS to tighten pricing by 30 to 35 basis points (bps) from initial pricing guidance to final pricing guidance and upsizing from US$3bil to final size of US$5bil,” it noted.
“Tight credit spreads of 10 bps achieved between the 5.75-year and 10-year and 15 bps between the 10-year and 30-year.”
The 5.75-year notes were supported by asset managers and fund managers at 60%, banks at 28%, insurance and pension funds at 7%, central banks and sovereign wealth funds at 2%, and other investors at 3%.
The 10-year notes saw asset managers and fund managers taking 62%, banks 13%, insurance and pension funds 20%, central banks and sovereign wealth funds 2%, and other investors 3%.
The 30-year notes were mainly backed by asset managers and fund managers at 71%, with official institutions and insurance firms taking 26% and banks, private banks and securities houses holding the remaining 3%.
Geographically, the bonds were distributed across global markets.
The 5.75-year notes were allocated to investors in Asia at 45%, the United States (US) at 31% and Europe and the Middle East at 24%.
The 10-year notes saw allocations of 29% in Asia, 54% in the US and 17% in Europe and the Middle East.
The 30-year notes were distributed to 18% of investors in Asia, 54% in the US, and 28% in Europe and the Middle East.
JP Morgan and Morgan Stanley acted as joint global coordinators, along with HSBC, Malayan Banking Bhd
and MUFG, which acted as joint bookrunners for the drawdown offering.
JP Morgan, Morgan Stanley, HSBC, Maybank and MUFG acted as joint arrangers and dealers for the global medium-term note update.
This issuance represents PETRONAS’ return to the international US dollar bond market since its US$3bil bond offering in April 2021.
