Tesoro redeems outstanding $299 million 6¼% notes via notes proceeds

By Susanna Moon

Chicago, Sept. 24 - Tesoro Corp. said it redeemed all of its outstanding $299 million 6¼% senior notes due November 2012 using proceeds of a notes offering.

Tesoro priced $925 million of senior notes in a two-part transaction on Sept. 13, as previously reported by Prospect News.

The deal included a $450 million tranche of non-callable five-year notes, which priced at par to yield 4¼%, and a $475 million tranche of 10-year notes priced at par to yield 5 3/8%.

Proceeds from the offering, expected to settle on Sept. 27, and cash on hand will be used to fund the company's cash tender offers for its outstanding 6 5/8% senior notes due 2015 and 6½% senior notes due 2017.

The redemption of the 6¼% notes and the refinancing of the 6 5/8% notes and 6½% notes will reduce interest expense, extend maturities and further strengthen Tesoro's balance sheet, according to a company press release on Monday.

The company said on Aug. 17 that it planned to redeem all $299,216,000 of its 6¼% notes on Sept. 21 at par plus accrued interest to the redemption date.

Tesoro is a San Antonio-based refiner and marketer of petroleum products.

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