Published on 5/9/2016 in the Prospect News High Yield Daily.
New Issue: Tesoro Logistics prices upsized $700 million of notes in two parts
By Paul A. Harris
Portland, Ore., May 9 – Tesoro Logistics LP and Tesoro Logistics Finance Corp. priced $700 million of senior notes (Ba3/BB) on Monday in a two-part sale that was upsized from $600 million, according to a syndicate source.
The deal included a $250 million add-on to the 6 1/8% senior notes due Oct. 15, 2021, which launched and priced at 100.25 to yield 6.069%. The reoffer price came at the rich end of the 100.00 area price talk.
In addition the company priced an upsized $450 million issue of new eight-year senior notes at par to yield 6 3/8%. The tranche was upsized from $350 million. The yield printed at the tight end of yield talk in the 6½% area.
Citigroup Global Markets Inc. is the left global coordinator. MUFG is the joint global coordinator.
Barclays, Goldman Sachs & Co., J.P. Morgan Securities LLC, Mizuho Securities, Wells Fargo Securities LLC, BBVA, BofA Merrill Lynch, BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., RBC Capital Markets, SMBC Nikko, SunTrust Robinson Humphrey Inc., TD Securities, UBS Investment Bank and U.S. Bancorp Investments Inc. are the joint bookrunners.
The overall transaction size was increased from $600 million.
The San Antonio-based owner and operator of crude oil and refined products logistics plans to use the proceeds to repay debt under both its revolver and its drop down credit facility, and for general partnership purposes.
| Issuers: | Tesoro Logistics LP and Tesoro Logistics Finance Corp.
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| Amount: | $700 million, increased from $600 million
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| Left global coordinator: | Citigroup Global Markets
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| Joint global coordinator: | MUFG
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| Joint bookrunners: | Barclays, Goldman Sachs & Co., J.P. Morgan Securities LLC, Mizuho Securities, Wells Fargo Securities LLC, BBVA, BofA Merrill Lynch, BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., RBC Capital Markets, SMBC Nikko, SunTrust Robinson Humphrey Inc., TD Securities, UBS Investment Bank, U.S. Bancorp Investments Inc.
|
| Trade date: | May 9
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| Settlement date: | May 12
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| Ratings: | Moody's Ba3
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| Standard & Poor's: BB
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| Distribution: | SEC registered
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| Marketing: | Quick to market
|
|
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| Add-on notes
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| Amount: | $250 million
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| Maturity: | Oct. 15, 2021
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| Security description: | Add-on to 6 1/8% senior notes due Oct. 15, 2021
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| Coupon: | 6 1/8%
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| Price: | 100.25
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| Yield to maturity: | 6.069%
|
| Spread: | 476 bps
|
| Call: | Make-whole call at Treasuries plus 50 bps until Oct. 15, 2016, then callable at 104.594
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| Price talk: | Par area (plus or minus ¼ point)
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| Original issue: | $550 million priced at par in July 2013
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| Total issue size: | $800 million
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|
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| New notes
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| Amount: | $450 million, increased from $350 million
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| Maturity: | May 1, 2024
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| Coupon: | 6 3/8%
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| Price: | Par
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| Yield: | 6 3/8%
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| Spread: | 470 bps
|
| Call: | Make-whole call at Treasuries plus 50 bps until May 1, 2019, then callable at 104.781
|
| Price talk: | 6 3/8% area
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