By Paul A. Harris
St. Louis, May 23 - Tesoro Corp. priced a $500 million issue of 6½% 10-year senior notes (Ba1/BB+) at a 165 basis point spread to Treasuries on Wednesday, according to an informed source.
The spread came 11 bps tighter than the Treasuries plus 175 bps price talk.
The notes came at an issue price of par.
Lehman Brothers and JP Morgan were joint bookrunners for the quick-to-market Rule 144A and Regulation S with registration rights issue. Goldman Sachs & Co. and RBS Greenwich Capital were co-managing.
Proceeds will be used to help repay a $700 million 364-day term loan used to finance part of the acquisition of certain assets from Shell Oil Products US.
Tesoro is a San Antonio-based refiner and marketer of petroleum products.
| Issuer: | Tesoro Corp.
|
| Amount: | $500 million
|
| Maturity: | June 1, 2017
|
| Security description: | Senior notes
|
| Bookrunners: | Lehman Brothers, JP Morgan
|
| Co-managers: | Goldman Sachs & Co. and RBS Greenwich Capital
|
| Coupon: | 6½%
|
| Price: | Par
|
| Yield: | 6½%
|
| Spread: | 164 bps
|
| Call features: | Make-whole at Treasuries plus 50 bps until June 1, 2012, then at 103.25, 102.167, 101.083, par on and after June 1, 2015
|
| Equity clawback: | Until June 1, 2010 for up to 35% at 106.50
|
| Change-of-control put: | 101
|
| Trade date: | May 23
|
| Settlement date: | May 29
|
| Ratings: | Moody's: Ba1
|
| Standard & Poor's: BB+
|
| Distribution: | Rule 144A/Regulation S with registration rights
|
| Price talk: | Treasuries plus 175 bps
|
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