Merkado Barkada
September 2, 2024 | 10:28am
Petron [PCOR 2.60 ?0.4%; 37% avgVol] [link] had its P17 billion preferred shares sale approved by the PSE. The offer period will run from September 5 through September 13, and the shares will list on September 23 under the ticker symbols “PRF4D” and “PRF4E”. The Series 4D prefs will carry an initial dividend rate of 6.8364% per year. The Series 4E will carry a rate of 7.1032%. Proceeds from the sale will go to refinance debt and to fund “general corporate purposes”.
MB BOTTOM-LINE: I’ve seen a lot of talk about institutional investors looking to “lock in” higher yields before rates come down, but I’m not sold on the thesis and even if I were, I would question whether those investors considered PCOR preferred shares the best way to execute on that thesis. I’m not saying that PCOR preferred shares are a gamble–juggling debt seems like PCOR’s primary business at this point–but I am saying that it’s not like there’s a central bank rush to drop rates that quickly that we’d need to operate in a “get em before they’re gone” mentality toward offerings like this. There are plenty of higher-yield options out there with a similar risk profile for non-institutional investors and institutional investors alike. I’ll just be watching this one for market sentiment.
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