Sunoco LP Announces $750M Senior Notes Offering

By Bobby Samwell • Thursday, March 20 15:15 • Permanent Link

Sunoco LP has announced a private offering of senior notes due 2033 in an aggregate principal amount of $750 million. The company plans to use the net proceeds from the offering to repay indebtedness, including redeeming in full NuStar Logistics, L.P.'s 5.750% senior notes due 2025 and repaying a portion of the outstanding borrowings under Sunoco’s revolving credit facility.

Sunoco LP (NYSE: SUN) is an energy infrastructure and fuel distribution master limited partnership operating in over 40 U.S. states, Puerto Rico, Europe, and Mexico. It has an extensive network of approximately 14,000 miles of pipeline and over 100 terminals for midstream operations. Sunoco’s general partner is owned by Energy Transfer LP (NYSE: ET).

It's worth noting that the offering of the notes has not been registered under the Securities Act of 1933, as amended, or any state securities laws. The notes may only be offered or sold in the U.S. pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.

As of the latest data available, Sunoco had total debt of $4.2 billion and a net leverage ratio of 4.7x. In the previous period, the company's total debt was $4.5 billion with a net leverage ratio of 5.1x, indicating a decrease in both total debt and net leverage ratio since the last reporting period.

Sunoco LP's revenue for the most recent quarter was $4.8 billion, up from $4.5 billion in the previous quarter. This represents a significant increase in revenue quarter-over-quarter. However, the company's net income for the most recent quarter was $110 million, down from $130 million in the previous quarter.

The private offering of senior notes is a strategic move by Sunoco LP to optimize its capital structure and reduce its overall cost of debt. The company aims to strengthen its financial position and enhance liquidity by refinancing existing debt at more favorable terms.

As Sunoco LP navigates the evolving energy landscape, the offering of senior notes and the intended use of proceeds reflect the company's commitment to proactive financial management and capital allocation strategies. Following these announcements, the company's shares moved -1.2%, and are now trading at a price of $57.83. If you want to know more, read the company's complete 8-K report here.

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