By Paul A. Harris
Portland, Ore., Feb. 28 – Delek Logistics Partners, LP and Delek Logistics Finance Corp. priced an upsized $650 million issue of five-year senior notes (B3/BB-/BB-) at par to yield 8 5/8% in a Wednesday drive-by, according to market sources.
The issue size increased from $550 million.
Wells Fargo Securities, LLC was the left bookrunner. Joint bookrunners were BofA Securities, Inc., MUFG and Fifth Third Securities, Inc.
The yield printed at the tight end of the 8 5/8% to 8¾% yield talk. Initial guidance was 8¾% to 9%.
Meanwhile timing was accelerated. When it was announced on Wednesday morning, the deal was scheduled to remain in the market until Thursday.
Prior to upsizing and launching at the tight end of talk, the deal was playing to $1.7 billion of demand, a trader said.
Proceeds plus a draw on the company’s revolver will be used to refinance its 6¾% senior notes due 2025 and to repay its term loan A due 2025. The incremental proceeds resulting from the $100 million upsizing of the deal will be used to repay debt under the revolver.
Delek Logistics is a Brentwood, Tenn.-based midstream company that owns, operates, acquires, and constructs crude oil and refined products logistics and marketing assets.
| Issuers: | Delek Logistics Partners, LP and Delek Logistics Finance Corp.
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| Amount: | $650 million, increased from $550 million
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| Issue: | Senior notes
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| Maturity: | March 15, 2029
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| Left bookrunner: | Wells Fargo Securities, LLC
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| Joint bookrunners: | BofA Securities, Inc., MUFG and Fifth Third Securities, Inc.
|
| Senior co-managers: | Citizens JMP Securities, LLC and PNC Capital Markets LLC
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| Co-managers: | RBC Capital Markets, LLC, Regions Securities LLC, U.S. Bancorp Investments, Inc., Barclays and Truist Securities, Inc.
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| Coupon: | 8 5/8%
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| Price: | Par
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| Yield: | 8 5/8%
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| Spread: | 436 bps
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| First call: | March 15, 2026 at 104.313
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| Trade date: | Feb. 28
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| Settlement date: | March 13
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| Ratings: | Moody’s: B3
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| S&P: BB-
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| Fitch: BB-
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 8 5/8% to 8¾%
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| Marketing: | Drive-by
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