Malaysia’s national oil and gas company Petroliam Nasional ( PETRONAS ) successfully returned to the US dollar bond market after an absence of four years, pricing on March 26 a triple-tranche issuance totalling US$5 billion. The deal was upsized from the initial target of US$3 billion on the back of strong investor demand, which saw the order book peaking at over US$17 billion.

The Reg S/144A deal consisted of a 5.75-year bond amounting to US$1.6 billion and was priced at a spread of 90 basis points ( bp ) over US treasuries – or 30bp tighter than the initial price guidance in the 120bp area – for a coupon of 4.95%. The second tranche has a tenor of 10 years amounting to US$1.8 billion, which was printed at a spread of 100bp over US treasuries – also 30bp inside the initial marketing range in the 130bp area – for a coupon of 5.34%. The final tranche was a 30-year bond amounting to US$1.6 billion, which was priced at a spread of 115bp over US treasuries, or 35bp back of the initial price guidance in the 150bp area, for a coupon of 5.848%.

The transaction represented the largest oil and gas issuance from Asia since PETRONAS issued a US$6 billion offering in 2020. Additionally, this is the largest international bond market transaction from Asia since 2021. PETRONAS last accessed the US dollar bond market in April 2021 when it raised US$3 billion.

In terms of geographic distribution, the 5.75-year bond was sold 45% in Asia, 31% in the US and 24% in Europe and the Middle East. By type of investors, asset and fund managers accounted for 60% of the paper, banks 28%, insurance companies and pension funds 7%, central banks and sovereign wealth funds 2% and other investors 3%.

The 10-year bond was allocated 54% in the US, 29% in Asia and 17% in Europe and the Middle East. Asset and fund managers were also the biggest buyers with a 62% share, followed by insurance companies and pension funds with 20%, banks 13%, central banks and sovereign wealth funds 2% and other investors 3%.

More than half of the 30-year bond was also allocated among US investors with 54%, Europe and the Middle East 28%, and Asia 18%. Asset and fund managers also drove this tranche as they bought 71% of the bond, official institutions and insurance companies 26%, and banks, private banks and securities houses 3%

J.P. Morgan and Morgan Stanley were the joint global coordinators and active joint bookrunners for the transaction, while HSBC, Maybank and MUFG Bank were the passive joint bookrunners. The five banks also acted as the joint arrangers and dealers of the company’s updated global medium-term note programme.