Petronas, Malaysia’s integrated oil and gas producer, has priced its new senior unsecured bond offerings, totaling $5 billion across three tranches. CreditSights reports that this large deal size has influenced Petronas’ existing bond curve.
The new bond offerings include $1.6 billion in 5-year bonds, $1.8 billion in 10-year bonds, and $1.6 billion in 30-year bonds. The final pricing for these tranches came in at T+90 bp, T+100 bp, and T+115 bp, respectively, which is tighter than the initial price targets (IPTs) of T+120 bp, T+130 bp, and T+150 bp.
CreditSights notes that the final pricings were tighter than expected, attributing this to a volatile macro environment, the Sarawak dispute overhang, and the large $5 billion deal size, which was not disclosed in the mandate.
The report highlights a key observation: Petronas’ existing curve sold off following the IPT announcement. Specifically, Petronas’ Apr-2030, Jan-2032, and Apr-2050 bonds, used as comparable bonds for fair value estimates, widened by 4 bp, 4 bp, and 10 bp, respectively. CreditSights believes this sell-off was primarily driven by the larger-than-anticipated $5 billion bond deal size.
Source: CreditSights