Petron Corporation has set the dividend rate for its P10 billion preferred shares offering at 9.5281 percent a year, based on the 5-year Philippine Dealing System Treasury Fixing rate of 6.2781 percent p.a. plus a spread of 3.25 percent.

Philippine Stock Exchange documents show, Petron is offering and listing a maximum of 100 million Perpetual Preferred Shares consisting of 50 milion shares for the primary offer and another 50 million shares to cover the over-allotment option.

The shares have been priced at P100 apiece. Petron has set the start of the offer period on February 15, 2010 and end on Feburary 26, 2010. The listing date has been tentatively set for March 5, 2010.

The preferred shares are nonvoting and non-convertible with a par value of P1.00 per share and are redeemable at the option of the company. The preferred shares will also have preference over common shares in the case of the dissolution of the company.

“The proceeds from the preferred share issuance will be mainly used for capital expenditures for the company’s refinery operations and the expansion of its retail network,” Petron President Eric O. Recto said earlier.

Petron said part of the proceeds would be used to upgrade its power generation system, which would cost approximately around P10 billion. Work will take place this year until 2012. It will also use the proceeds for the repayment of part of its P45.6-billion short-term debt as of September, to free up credit line for working capital requirements particularly for the importation of crude oil and petroleum products.