Sunoco cancels consent bid for 6.25%, 6.375% notes, will redeem them

By Wendy Van Sickle

Columbus, Ohio, Oct. 18 – Sunoco LP and Sunoco Finance Corp. terminated their consent solicitation to amend the indentures governing their $800 million 6.25% senior notes due 2021 and their $800 million 6.375% senior notes due 2023, according to a press release issued Wednesday evening.

The consent solicitation was announced Oct. 10.

Sunoco said it now plans to redeem the 2021 notes and the 2023 notes at a make-whole price prior to the closing of its previously announced pending sale of about 1,112 company-operated retail fuel outlets to 7-Eleven, Inc.

The make-whole redemptions are planned in order to satisfy one of the closing conditions under the 7-Eleven purchase agreement, according to the release. Sunoco said it believes this will have no impact on the timing of the transaction and no meaningful impact on the expected net proceeds, and that it has access to near-term financing options in the current market.

Sunoco continues to anticipate closing the 7-Eleven transaction within the fourth quarter of 2017.

All consents previously delivered under the solicitation will be revoked, and no consent fees will be paid.

The consent solicitation was intended to allow the consummation of the asset sale to 7-Eleven and the sale of Sunoco's remaining company-operated retail assets located in the continental United States.

The proposed amendments would have also eliminated any requirement to make a change of control offer at 101 or an asset sale offer at par as a result of the retail divestiture.

Additionally, the proposed amendments would have prohibited the issuers from optionally redeeming the 2021 notes until April 15, 2019 and the 2023 notes until April 1, 2020, and provide holders a put option at 101.563 on April 15, 2019 for the 2021 notes and 101.594 on April 1, 2020 for the 2023 notes.

The company offered a consent fee of $10 per $1,000 principal amount of notes. The offer had been set to expire at 5 p.m. ET on Oct. 18.

Sunoco added Wednesday that its previously announced redemption of all of its $600 million of 5.5% notes due 2020 at 102.75 plus accrued interest will go forward, subject to the closing of the 7-Eleven transaction.

BofA Merrill Lynch (888 292-0070 or 980 388-4813) was the solicitation agent for the consent solicitation.

Ipreo LLc (888 593-9546 or 212 849-3880) was the information and tabulation agent.

Based in Dallas, Sunoco LP is a master limited partnership that operates 1,353 convenience stores and retail fuel sites and distributes motor fuel to 7,937 convenience stores, independent dealers, commercial customers and distributors in 30 states.

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