Published on 7/29/2013 in the Prospect News High Yield Daily.
New Issue: Tesoro Logistics prices upsized $550 million eight-year notes at par to yield 6 1/8%
By Paul A. Harris
Portland, Ore., July 29 - Tesoro Logistics LP and Tesoro Logistics Finance Corp. priced an upsized $550 million issue of eight-year senior notes (B1/BB-) at par to yield 6 1/8% on Monday, according to a syndicate source.
The deal was upsized from $300 million. The offering was announced in an 8-K filing with the Securities and Exchange Commission.
The yield printed at the tight end of yield talk set in the 6¼% area.
BofA Merrill Lynch was the left bookrunner.
Wells Fargo Securities LLC, Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC and UBS Securities LLC were the joint bookrunners.
Proceeds will be used to repay borrowings under the company's revolver and to fund a portion of the Carson asset acquisition.
The San Antonio-based master limited partnership, controlled by Tesoro Corp., owns, operates, develops and acquires logistics assets integral to Tesoro's refining and marketing operations.
| Issuer: | Tesoro Logistics LP and Tesoro Logistics Finance Corp.
|
| Amount: | $550 million, increased from $300 million
|
| Maturity: | Oct. 15, 2021
|
| Securities: | Senior notes
|
| Left bookrunner: | BofA Merrill Lynch
|
| Joint bookrunners: | Wells Fargo Securities LLC, Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC, UBS Securities LLC
|
| Co-managers: | Barclays, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, RBC Capital Markets Inc., SunTrust Robinson Humphrey Inc.
|
| Coupon: | 6 1/8%
|
| Price: | Par
|
| Yield: | 6 1/8%
|
| Spread: | 387 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Oct. 15, 2016, then callable at 104.594, 103.063, 101.531, par on and after Oct. 15, 2019
|
| Equity clawback: | 35% at 106.125 until Oct. 15, 2016
|
| Investor put: | 101% upon change of control
|
| Trade date: | July 29
|
| Settlement date: | Aug. 1
|
| Ratings: | Moody's: B1
|
| Standard & Poor's: BB-
|
| Distribution: | Rule 144A and Regulation S with registration rights
|
| Price talk: | 6¼% area
|
| Marketing: | Quick to market
|
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