Published on 11/8/2005 in the Prospect News High Yield Daily.
New Issue: Tesoro prices $900 million seven-, 10-year notes
By Paul A. Harris
St. Louis, Nov. 8 - Tesoro Corp. priced $900 million of senior notes (Ba1/BB+) in two equally sized tranches on Tuesday, according to a syndicate source.
The company priced a $450 million issue of seven-year notes at par to yield 6¼%, in the middle of the 6 1/8% to 6 3/8% price talk.
Tesoro also priced $450 million 10-year notes at par to yield 6 5/8%, also in the middle of the 6½% to 6¾% price talk.
Lehman Brothers, Goldman Sachs and JP Morgan were joint bookrunners for the Rule 144A/Regulation S notes.
Proceeds and cash on hand will be used to fund the tender for the company's 9 5/8% senior subordinated notes due 2008, its 9 5/8% senior subordinated notes due 2012 and its 8% senior secured notes due 2008.
Tesoro is a San Antonio-based oil refiner.
| Issuer: | Tesoro Corp.
|
| Amount: | $900 million
|
| Security description: | Senior notes in two tranches
|
| Bookrunners: | Lehman Brothers, Goldman Sachs & Co., JP Morgan
|
| Trade date: | Nov. 8
|
| Settlement date: | Nov. 16
|
| Ratings: | Moody's: Ba1
|
| Standard & Poor's: BB+
|
|
|
| Seven-year notes
|
| Amount: | $450 million
|
| Maturity: | Nov. 1, 2012
|
| Coupon: | 6¼%
|
| Price: | Par
|
| Yield: | 6¼%
|
| Spread: | 171 basis points
|
| Call feature: | Make-whole call at Treasuries plus 50 basis points
|
| Equity clawback: | Until Nov. 1, 2008 for up to 35% at 106.25
|
| Price talk: | 6 1/8% to 6 3/8%
|
|
|
| 10-year notes
|
| Amount: | $450 million
|
| Maturity: | Nov. 1, 2015
|
| Coupon: | 6 5/8%
|
| Price: | Par
|
| Yield: | 6 5/8%
|
| Spread: | 206 basis points
|
| Call features: | Make-whole call prior to Nov. 1, 2010, then callable at 103.313, 102.208, 101.104, par on and after Nov. 1, 2013
|
| Equity clawback: | Until Nov. 1, 2008 for up to 35% at 106.625
|
| Price talk: | 6½% to 6¾%
|
|
|
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