HF Sinclair Announces Pricing Terms of Cash Tender Offer of Debt Securities

Rhea-AI Summary

HF Sinclair (NYSE: DINO) has announced the pricing terms for its previously announced cash tender offer to purchase outstanding notes. The company will pay a Total Tender Offer Consideration that includes an Early Tender Premium of $30 per $1,000 principal amount of accepted notes.

For the 6.375% Senior Notes due 2027, the company accepted $150 million with a 41.5% proration factor at $1,018.64 per $1,000. For the 5.875% Senior Notes due 2026, they accepted $448.09 million from HF Sinclair and $48.496 million from Holly Frontier, both at $1,010.01 per $1,000 with 100% proration.

The Early Settlement Date is expected on January 28, 2025. The Tender Offer remains open until February 7, 2025. BofA Securities and Citigroup are serving as Lead Dealer Managers for the offer.

Positive

• Successful debt refinancing initiative with significant noteholder participation
• 100% acceptance rate for 2026 Notes tender offers
• Early Tender Premium of $30 per $1,000 principal amount offered to participants

Negative

• acceptance (41.5%) of 2027 Notes due to $150 million tender cap
• Additional interest payments required on accepted notes until settlement date

Insights

Fixed Income Analyst

This debt tender offer represents a strategic move by HF Sinclair to optimize its capital structure. The pricing terms reveal several key insights:

• The strong participation rate, particularly for the 2027 Notes which saw $361.1M tendered against a $150M cap, indicates robust investor interest and suggests the tender prices were attractive to bondholders.
• The tender premium of approximately $18.64 per $1,000 for the 2027 Notes (excluding the early tender premium) reflects current market conditions and the company's credit quality.
• The successful execution of this tender offer, with the Financing Condition already satisfied, demonstrates HF Sinclair's strong access to capital markets and effective liability management.

The differential pricing between the 2026 and 2027 Notes ($1,010.01 vs $1,018.64) appropriately reflects the longer duration risk of the 2027 Notes. The high subscription rate suggests investors are actively seeking to reposition their fixed-income portfolios, possibly in response to anticipated interest rate movements.

From a credit perspective, this liability management exercise could potentially lead to reduced interest expenses and an improved debt maturity profile, though the net impact will depend on the financing terms of any replacement debt. The market's strong response to this tender offer indicates confidence in HF Sinclair's credit quality and financial management strategy.

DALLAS, Jan. 24, 2025 /PRNewswire/ -- HF Sinclair Corporation (NYSE: DINO) (the "Corporation") today announced the pricing terms for the previously announced cash tender offer (the "Tender Offer") to purchase the outstanding notes (collectively, the "Notes" and each a "Series" of Notes) listed in the table below. All other terms and conditions of the Tender Offer remain unchanged and are described in the Offer to Purchase dated January 8, 2025, as amended on January 8, 2025 (the "Offer to Purchase"). The Financing Condition for the Tender Offer as described in the Offer to Purchase has been satisfied. Capitalized terms used in this press release and not defined herein have the meanings given to them in the Offer to Purchase.

The applicable total consideration to be paid in the Tender Offer for each Series of Notes accepted for purchase was determined by reference to the applicable fixed spread specified for such Series of Notes over the yield (the "Reference Yield") based on the bid-side price of the applicable U.S. Treasury Securities set forth in the table below (the "Total Tender Offer Consideration"). The Reference Yields listed in the table below were determined (pursuant to the Offer to Purchase) at 10:00 a.m., New York City time, today, January 24, 2025, by the Lead Dealer Managers. The applicable Total Tender Offer Consideration for each Series of Notes includes an Early Tender Premium (as defined in the Offer to Purchase) of $30 per $1,000 principal amount of Notes accepted for purchase by the Corporation.

The following table sets forth the aggregate principal amounts of each Series of Notes that the Corporation has accepted for purchase and pricing information for the Tender Offer:

Title of Security		CUSIP(1)		Issuer		Aggregate Principal Amount Outstanding Prior to the Tender Offer		Reference U.S. Treasury Security		Reference Yield		Fixed Spread (basis points) (2)		Aggregate Principal Amount Tendered as of the Early Tender Deadline  (3)		Aggregate Principal Amount Accepted for Purchase		Final Proration Factor (4)		Total Tender Offer Consideration (5)
6.375% Senior      Notes due 2027      (the "2027 Notes")		403949 AK6 U4322C AD5 403949 AP5		HF Sinclair		$ 399,875,000		2.625% U.S.T. due 4/15/25		4.432 %		50		$361,067,000		$150,000,000		41.5 %		$1,018.64
5.875% Senior      Notes due 2026		403949 AF7 U4322C AB9 403949 AB6		HF Sinclair		$ 797,100,000		4.250% U.S.T. due 12/31/25		4.256 %		50		$448,090,000		$448,090,000		100 %		$1,010.01
5.875% Senior      Notes due 2026		436106AA6		Holly Frontier		$ 202,900,000		4.250% U.S.T. due 12/31/25		4.256 %		50		$48,496,000		$48,496,000		100 %		$1,010.01

(1)	No representation is made as to the correctness or accuracy of the CUSIP numbers listed in this Offer to Purchase or printed on the Notes. They are provided solely for the convenience of Holders of the Notes.
(2)	Includes the Early Tender Premium of $30 per $1,000 principal amount of Notes for each Series.
(3)	As reported by D.F. King & Co., Inc., the tender and information agent for the Tender Offer.
(4)	The final proration factor has been rounded to the nearest tenth of a percentage point for presentation purposes.
(5)	Payable for each $1,000 principal amount of applicable Notes validly tendered at or prior to the Early Tender Deadline and accepted for purchase by the Corporation and includes the Early Tender Premium. In addition, Holders whose Notes are accepted will also receive interest on such Notes accrued to the applicable settlement date.

The Corporation expects to accept for payment Notes validly tendered and not validly withdrawn as shown in the table above on January 28, 2025 (the "Early Settlement Date"). Because the total aggregate principal amount of the 2027 Notes validly tendered prior to the Early Tender Deadline exceeds the $150.0 million 2027 Notes Tender Cap, the Corporation does not expect to accept any further tenders of the 2027 Notes.

The Tender Offer will remain open until 5:00 p.m., New York City time, on February 7, 2025, unless extended or earlier terminated as described in the Offer to Purchase (such time and date, as it may be extended, the "Expiration Date"). Each Holder who validly tenders its Notes after the Early Tender Deadline will not be eligible to receive the Early Tender Premium of $30 per $1,000 principal amount of Notes. In accordance with the terms of the Offer to Purchase, the Corporation reserves the right to increase the Maximum Aggregate Purchase Price or otherwise amend the Tender Offer, subject to applicable law.

All payments for Notes tendered on or before the Early Tender Deadline that are purchased by the Corporation will also include accrued and unpaid interest on the principal amount of Notes tendered and accepted for purchase from the last interest payment date applicable to the relevant Series of Notes up to, but not including, the Early Settlement Date. Notes that have been validly tendered and not validly withdrawn at or before the Early Tender Deadline and are accepted in the Tender Offer will be purchased, retired and cancelled by the Corporation on the Early Settlement Date.

BofA Securities and Citigroup are the Lead Dealer Managers for the Tender Offer. D.F. King & Co., Inc. is the Tender Agent and Information Agent. Persons with questions regarding the Tender Offer should contact BofA Securities, Inc. at +1 (888) 292-0070 (toll-free) or +1 (980) 387-5602 (collect) or debt_advisory@bofa.com or Citigroup Global Markets Inc. at +1 (800) 558-3745 (toll free) or +1 (212) 723-6106 or ny.liabilitymanagement@citi.com. Questions regarding the tendering of Notes and requests for copies of the Offer to Purchase and related materials should be directed to D.F. King & Co., Inc. at (212) 269-5550 (for banks and brokers) or (800) 949-2583 (all others, toll-free) or email DINO@dfking.com.

This press release is neither an offer to purchase nor a solicitation of an offer to sell the Notes. The Tender Offer is made only by the Offer to Purchase and the information in this press release is qualified by reference to the Offer to Purchase. There is no separate letter of transmittal in connection with the Offer to Purchase. None of the Corporation, the Corporation's Board of Directors, the Lead Dealer Managers, the Tender Agent and Information Agent or the trustee with respect to any Notes is making any recommendation as to whether Holders should tender any Notes in response to the Tender Offer, and neither the Corporation nor any such other person has authorized any person to make any such recommendation. Holders must make their own decision as to whether to tender any of their Notes, and, if so, the principal amount of Notes to tender.

About HF Sinclair Corporation:

HF Sinclair Corporation, headquartered in Dallas, Texas, is an independent energy company that produces and markets high-value light products such as gasoline, diesel fuel, jet fuel, renewable diesel and lubricants and other specialty products. HF Sinclair owns and operates refineries located in Kansas, Oklahoma, New Mexico, Wyoming, Washington and Utah. HF Sinclair provides petroleum product and crude oil transportation, terminalling, storage and throughput services to our refineries and the petroleum industry. HF Sinclair markets its refined products principally in the Southwest U.S., the Rocky Mountains extending into the Pacific Northwest and in other neighboring Plains states and supplies high-quality fuels to more than 1,500 branded stations and licenses the use of the Sinclair brand at more than 300 additional locations throughout the country. HF Sinclair produces renewable diesel at two of its facilities in Wyoming and also at its facility in New Mexico. In addition, subsidiaries of HF Sinclair produce and market base oils and other specialized lubricants in the U.S., Canada and the Netherlands, and export products to more than 80 countries.

FOR FURTHER INFORMATION, Contact:
Craig Biery, Vice President, Investor Relations
HF Sinclair Corporation
214-954-6510

Cautionary Statement Regarding Forward-Looking Statements:

The following is a "safe harbor" statement under the Private Securities Litigation Reform Act of 1995: The statements in this press release relating to matters that are not historical facts, including those regarding the Tender Offer and the timing and outcome thereof, are "forward-looking statements" that involve certain risks and uncertainties that could cause actual outcomes and results to materially differ from what is expressed, implied or forecast in such statements. Any differences could be caused by a number of factors, including, but not limited to, the ability to complete the offering, general market conditions and other financial, operational and legal risks and uncertainties detailed from time to time in the Corporation's SEC filings. All forward-looking statements included in this press release are expressly qualified in their entirety by the foregoing cautionary statements. The forward-looking statements speak only as of the date made and, other than as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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SOURCE HF Sinclair Corporation

FAQ

What is the total amount of notes HF Sinclair (DINO) accepted in the tender offer?

HF Sinclair accepted approximately $646.586 million in total notes, consisting of $150 million of 2027 Notes and $496.586 million of 2026 Notes.

What is the Early Tender Premium offered by DINO in the January 2025 tender offer?

HF Sinclair offered an Early Tender Premium of $30 per $1,000 principal amount of Notes accepted for purchase.

When is the settlement date for DINO's 2025 tender offer?

The Early Settlement Date is expected to be January 28, 2025.

What is the proration factor for DINO's 2027 Notes in the tender offer?

The final proration factor for the 2027 Notes is 41.5%, due to the $150 million tender cap.

When does DINO's 2025 tender offer expire?

The Tender Offer expires at 5:00 p.m., New York City time, on February 7, 2025, unless extended or terminated earlier.