By William Gullotti and Cristal Cody
Buffalo, N.Y., Feb. 27 – Phillips 66 Co. priced $1.1 billion of new notes due 2031 and 2054 and a $400 million tap of 5.3% notes due 2033 on Monday, according to an FWP filing and a 424B3 filing with the Securities and Exchange Commission and details from a market source.
Phillips 66 sold $600 million of 5.25% notes due June 15, 2031 at 99.583 to yield 5.321%, or a spread of 100 basis points over Treasuries. Price talk was in the Treasuries plus 120 bps area.
The second new series is $500 million of 5.65% notes due June 15, 2054 priced at 125 bps over Treasuries, or at 99.908 to yield 5.657%. Talk had this tranche coming in the Treasuries plus 145 bps area.
Phillips 66 priced the $400 million tap of 5.3% notes due June 30, 2033 at 99.36 to yield 5.387%, or at a spread of 110 bps over Treasuries, versus spread talk in the 130 bps area. The additional 2033 notes are issued under the same indenture and Cusip as the initial $500 million issued on March 29, 2023 and will trade interchangeably with the initial offering.
The 2031 notes are callable at make-whole premium of Treasuries plus 15 bps until April 15, 2031, followed by a par call. The 2054 notes have a make-whole call at Treasuries plus 20 bps until Dec. 15, 2053, likewise followed by a par call.
As with the initial issue, the additional 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.
Mizuho Securities USA LLC, MUFG Securities Americas Inc., RBC Capital Markets, LLC, Scotia Capital (USA) Inc., SMBC Nikko Securities America, Inc., Truist Securities, Inc., Barclays, BofA Securities, Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, PNC Capital Markets LLC and TD Securities (USA) LLC are the joint bookrunning managers.
The notes are guaranteed by Phillips 66.
Proceeds will be used for general corporate purposes, including to repay debt. The debt repayment may include all or a portion of the $825 million outstanding on DCP Midstream Operating, LP’s 5.375% notes due 2025, Phillips 66 Co.’s $1.5 billion delayed-draw term loan from March 27, 2023 and/or Phillips 66’s outstanding commercial paper borrowings.
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: | $1.5 billion
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| Issue: | Senior notes
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| Bookrunners: | Mizuho Securities USA LLC, MUFG Securities Americas Inc., RBC Capital Markets, LLC, Scotia Capital (USA) Inc., SMBC Nikko Securities America, Inc., Truist Securities, Inc., Barclays, BofA Securities, Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, PNC Capital Markets LLC and TD Securities (USA) LLC
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| Co-managers: | Academy Securities, Inc., CIBC World Markets Corp., Commerz Markets LLC, Credit Agricole Securities (USA) Inc., HSBC Securities (USA) Inc., ICBC Standard Bank plc, Loop Capital Markets LLC, Standard Chartered Bank, UniCredit 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: | Feb. 26
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| Settlement date: | Feb. 28
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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 2031
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| Amount: | $600 million
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| Maturity: | June 15, 2031
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| Coupon: | 5.25%
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| Price: | 99.583
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| Yield: | 5.321%
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| Spread: | Treasuries plus 100 bps
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| Call features: | Make-whole at Treasuries plus 15 bps until April 15, 2031; then a par call
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| Price talk: | Treasuries plus 120 bps area
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| Cusip: | 718547AU6
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| Add-on notes due 2033
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| Amount: | $400 million, add-on
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| Maturity: | June 30, 2033
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| Coupon: | 5.3%
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| Price: | 99.36 plus accrued and unpaid interest from Dec. 30, 2023
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| Yield: | 5.387%
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| Spread: | Treasuries plus 110 bps
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| Call features: | Make-whole at Treasuries plus 30 bps until March 30, 2033; then a par call
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| Price talk: | Treasuries plus 130 bps area
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| Cusip: | 718547AR3
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| Total issue: | $900 million, including initial $500 million issued March 29, 2023
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| Notes due 2054
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| Amount: | $500 million
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| Maturity: | June 15, 2054
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| Coupon: | 5.65%
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| Price: | 99.908
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| Yield: | 5.657%
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| Spread: | Treasuries plus 125 bps
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| Call features: | Make-whole at Treasuries plus 20 bps until Dec. 15, 2053; then a par call
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| Price talk: | Treasuries plus 145 bps area
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| Cusip: | 718547AW2
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