Holly Energy to sell $100 million more 6% notes due 2024 on Tuesday

By Paul A. Harris

Portland, Ore., Sept. 19 – Holly Energy Partners, LP and Holly Energy Finance Corp. plan to price a $100 million tack-on to their 6% senior notes due Aug. 1, 2024 (expected ratings B2/BB) on Tuesday, trailing a mid-morning conference call with investors, according to market sources.

Initial price guidance is in the 103 area, a trader said.

Citigroup Global Markets Inc. is the lead bookrunner for the Rule 144A for life offering. BofA Merrill Lynch, BBVA Securities Inc., MUFG, TD Securities and Wells Fargo Securities LLC are the joint bookrunners.

Scotia Capital, SMBC Nikko, SunTrust Robinson Humphrey Inc. and U.S. Bancorp Investments Inc. are the senior co-managers. BNP Paribas Securities Corp., Fifth Third Bank and PNC Capital Markets are the co-managers.

The notes feature a make-whole call at Treasuries plus 50 basis points until Aug. 1, 2019, then become callable at 104.5. They also feature a 35% equity clawback at 106 until Aug. 1, 2019, and a 101% poison put.

The Dallas-based petroleum pipeline operator plans to use the proceeds to repay debt under its revolving credit facility.

The original $400 million issue priced at par in July 2016.

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