By Mary-Katherine Stinson and Cristal Cody
Lexington, Ky., March 28 – Phillips 66 Co. detailed its $1.25 billion of guaranteed senior notes (A3/BBB+) that priced in two tranches on Monday, according to an FWP filing with the Securities and Exchange Commission and details from a market source.
Phillips 66 sold $750 million of 4.95% notes due Dec. 1, 2027 at 99.768 to yield 5.003%, or a spread of 140 basis points over Treasuries after spread talk in the 170 bps area.
Phillips 66 sold $500 million of 5.3% notes due June 30, 2033 at 99.529 to yield 5.357%, or at a spread of 182 bps over Treasuries after talk in the Treasuries plus 205 bps area.
The 2027 notes are callable at make-whole premium of Treasuries plus 25 bps until Nov. 1, 2027, then at par for the last month.
The 2033 notes are callable at make-whole premium of Treasuries plus 30 bps until March 30, 2033, then at par for the last three months.
Goldman Sachs & Co. LLC, Mizuho Securities USA LLC, MUFG Securities Americas Inc., SMBC Nikko Securities America, Inc., TD Securities (USA) LLC, Truist Securities, Inc., Barclays, BofA Securities, Inc., RBC Capital Markets, LLC and Scotia Capital (USA) Inc. are the joint bookrunners.
The notes are guaranteed by Phillips 66.
Proceeds from the notes will be used, along with borrowings under a term loan and cash on hand, to fund Phillips 66’s merger with DCP Midstream, LP.
The offering is not conditioned on closing of the merger. However, if the merger does not occur on or prior to 11:59 p.m. ET on Dec. 31, 2023 or if the merger agreement is not terminated by then without the closing of the merger, Phillips 66 will be required to redeem the notes at a special mandatory redemption price of 101.
Phillips 66 is a Houston-based energy manufacturing and logistics company with midstream, chemicals, refining, and marketing and specialties businesses.
| Issuer: | Phillips 66 Co.
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| Guarantor: | Phillips 66
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| Amount: | $1.25 billion
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| Issue: | Senior notes
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| Bookrunners: | Goldman Sachs & Co. LLC, Mizuho Securities USA LLC, MUFG Securities Americas Inc., SMBC Nikko Securities America, Inc., TD Securities (USA) LLC, Truist Securities, Inc., Barclays, BofA Securities, Inc., RBC Capital Markets, LLC and Scotia Capital (USA) Inc.
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| Co-managers: | CIBC World Markets Corp., Commerz Markets LLC, HSBC Securities (USA) Inc., ICBC Standard Bank plc, Loop Capital Markets LLC and U.S. Bancorp Investments, Inc.
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| Trustee: | U.S. Bank Trust Co., NA
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| Counsel to issuer: | Bracewell LLP
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| Trade date: | March 27
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| Settlement date: | March 29
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| Ratings: | Moody’s: A3
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| S&P: BBB+
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| Distribution: | SEC registered
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| Notes due 2027
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| Amount: | $750 million
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| Maturity: | Dec. 1, 2027
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| Coupon: | 4.95%
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| Price: | 99.768
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| Yield: | 5.003%
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| Spread: | Treasuries plus 140 bps
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| Call features: | At 101 if the merger does not occur by Dec. 31, 2023; at make-whole premium of Treasuries plus 25 bps until Nov. 1, 2027; then a par call
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| Price guidance: | Treasuries plus 170 bps area
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| Cusip: | 718547AT9
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| Notes due 2033
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| Amount: | $500 million
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| Maturity: | June 30, 2033
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| Coupon: | 5.3%
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| Price: | 99.529
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| Yield: | 5.357%
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| Spread: | Treasuries plus 182 bps
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| Call features: | At 101 if the merger does not occur by Dec. 31, 2023; at a make-whole premium of Treasuries plus 30 bps until March 30, 2033; then a par call
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| Price guidance: | Treasuries plus 205 bps area
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| Cusip: | 718547AR3
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