Tesoro to sell $1.6 billion of senior notes in two parts on Thursday

By Paul A. Harris

Portland, Ore., Dec. 15 – Tesoro Corp. plans to price a $1.6 billion two-part offering of senior notes in a quick-to-market Thursday deal, according to market sources.

The deal, which is being shopped by means of an internet roadshow, features seven-year notes, which come with three years of call protection, and 10-year notes, which come with five years of call protection.

Early guidance has the seven-year notes coming with a yield in the high 4% area and the 10-year notes in the 5% area.

Tranche sizes remain to be determined.

Goldman Sachs & Co. is the left bookrunner for the Rule 144A with registration rights and Regulation S offering. MUFG and Wells Fargo Securities LLC are the joint bookrunners.

SunTrust Robinson Humphrey Inc. and UBS Investment Bank are the co-managers.

The San Antonio-based owner, operator, developer and acquirer of crude oil and refined products logistics assets plans to use the proceeds, along with cash on hand and revolver borrowings, to fund the cash consideration and other amounts payable under the terms of its merger with Western Refining, Inc., and to repay and redeem certain outstanding debt of Western Refining and its subsidiaries.

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