HF Sinclair Corporation Announces Pricing of Senior Notes Offering

Rhea-AI Summary

HF Sinclair (NYSE: DINO) has announced the pricing of a $1.4 billion senior notes offering, comprising $650 million of 5.750% Senior Notes due 2031 and $750 million of 6.250% Senior Notes due 2035. The notes are priced at 99.667% and 99.475% of principal amount, respectively.

The offering is expected to close on January 23, 2025. The proceeds will be used to repay $350 million in outstanding borrowings under Holly Energy Partners' revolving credit agreement, fund a tender offer of up to $1,050 million for existing notes, and general corporate purposes. Interest payments will be made semi-annually on January 15 and July 15, with the first payment due July 15, 2025.

The offering is being conducted through multiple joint book-running managers including BofA Securities, MUFG, SMBC Nikko, and Wells Fargo Securities, among others.

Positive

• Successful pricing of $1.4 billion senior notes offering
• Debt restructuring through tender offer of existing notes
• Repayment of $350 million revolving credit agreement borrowings

Negative

• Taking on substantial new debt with higher interest rates (5.750% and 6.250%)

Insights

Fixed Income Analyst

HF Sinclair's $1.4 billion senior notes offering represents a strategic debt restructuring move with significant implications. The dual-tranche structure, comprising $650 million in 2031 notes at 5.750% and $750 million in 2035 notes at 6.250%, is priced competitively given the current rate environment. The slight discount to par (99.667% and 99.475%) suggests strong market reception while providing a modest yield pickup for investors.

The debt refinancing strategy is particularly noteworthy - using proceeds to retire $350 million in revolving credit and targeting up to $1.05 billion in tender offers for existing notes. This liability management exercise should optimize the company's debt maturity profile and potentially reduce interest expenses, despite the current higher rate environment. The extension of maturities to 2031 and 2035 provides substantial financial flexibility.

The strong syndicate of banks led by major institutions indicates robust market confidence in DINO's credit profile. The semi-annual interest payment structure aligns with industry standards, while the registration under an existing shelf offers efficient market access.

Energy Market Analyst

This financing move strengthens DINO's position in the competitive refining sector. As an independent energy company with strategic assets across six states, the fresh capital structure enhances operational flexibility. The company's diverse portfolio spanning traditional refined products, renewable diesel and specialty lubricants provides multiple revenue streams that support this debt offering.

The timing is particularly strategic given the evolving energy landscape. With operations in key regions like the Southwest and Rocky Mountains and a significant branded retail presence through over 1,800 locations, DINO maintains strong market positioning. The renewable diesel capabilities at three facilities demonstrate forward-thinking adaptation to energy transition trends, while the international base oils business adds valuable diversification.

The successful placement of these notes indicates market confidence in DINO's business model and growth trajectory. The extended maturity profile provides runway for potential capital investments in both traditional and renewable operations, important for maintaining competitiveness in the evolving energy sector.

DALLAS--(BUSINESS WIRE)-- HF Sinclair Corporation (NYSE: DINO) (the “Corporation”) announced today that it has priced an offering of $1,400,000,000 aggregate principal amount of its senior notes, consisting of $650,000,000 aggregate principal amount of 5.750% Senior Notes due 2031 (the “2031 Notes”) and $750,000,000 aggregate principal amount of 6.250% Senior Notes due 2035 (the “2035 Notes”, and together with the 2031 Notes, the “Notes”) at a price to the public of 99.667% and 99.475%, respectively, of the principal amount thereof. The offering is expected to close on January 23, 2025, subject to the satisfaction of customary closing conditions.

The Corporation intends to use the net proceeds from the offering to repay $350,000,000 in outstanding borrowings under the revolving credit agreement of its wholly owned subsidiary, Holly Energy Partners, L.P., to fund the concurrent tender offer for cash for an aggregate purchase price (excluding accrued interest) of up to $900,000,000, to be increased to $1,050,000,000 (as it may be increased or decreased by the Corporation in accordance with applicable law), of (i) up to $150,000,000 principal amount of the Corporation’s outstanding 6.375% Senior Notes due 2027, (ii) the Corporation’s outstanding 5.875% Senior Notes due 2026 and (iii) HollyFrontier Corporation’s outstanding 5.875% Senior Notes due 2026 and the remainder, if any, for general corporate purposes, which may include capital expenditures.

Interest on the Notes will be payable on January 15 and July 15 of each year. The first interest payment on the Notes will be due on July 15, 2025.

BofA Securities, MUFG, SMBC Nikko, Wells Fargo Securities, Citigroup, Scotiabank, TD Securities and Truist Securities are acting as joint book-running managers for the offering. Barclays, Citizens Capital Markets, Comerica Securities, Goldman Sachs & Co. LLC and PNC Capital Markets LLC also serve as co-managers for the offering. The offering is being made pursuant to an effective shelf registration statement that was previously filed with the Securities and Exchange Commission (the “SEC”) and only by means of a prospectus supplement and accompanying prospectus, copies of which may be obtained from:

BofA Securities, Inc.
201 North Tryon Street
NC1-022-02-25
Charlotte, NC 28255-0001
Attention: Prospectus Department
Toll-Free: 1-800-294-1322
Email: dg.prospectus_requests@bofa.com

MUFG Securities Americas Inc.
1221 Avenue of the Americas, 6th Floor
New York, New York 10020
Attention: Capital Markets Group
Toll-Free: 1-877-649-6848
Email: syndicate@us.sc.mufg.jp

SMBC Nikko Securities America, Inc.
277 Park Avenue
New York, New York 10172
Attention: Debt Capital Markets
Toll-Free: 1-888-868-6856
E-mail: prospectus@smbcnikko-si.com

Wells Fargo Securities, LLC
608 2nd Avenue South, Suite 1000
Minneapolis, MN 55402
Attention: WFS Customer Service
Toll-Free: 1-800-645-3751
E-mail: wfscustomerservice@wellsfargo.com.

An electronic copy of the prospectus supplement and accompanying prospectus is also available on the website of the SEC at www.sec.gov.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Notes in any state or jurisdiction in which such offer, solicitation or sale of the Notes would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

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.

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 Notes offering and the expected use of proceeds therefrom, 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250108735695/en/

Craig Biery, Vice President, Investor Relations

HF Sinclair Corporation

214-954-6510

Source: HF Sinclair Corporation

FAQ

What is the total value of HF Sinclair's (DINO) new senior notes offering?

HF Sinclair's new senior notes offering totals $1.4 billion, consisting of $650 million in 2031 Notes and $750 million in 2035 Notes.

What are the interest rates for DINO's 2031 and 2035 Senior Notes?

The 2031 Notes carry a 5.750% interest rate, while the 2035 Notes carry a 6.250% interest rate.

When will DINO's new senior notes begin paying interest?

The first interest payment on the Notes will be due on July 15, 2025, with subsequent payments every January 15 and July 15.

How will HF Sinclair (DINO) use the proceeds from the senior notes offering?

The proceeds will be used to repay $350 million in revolving credit borrowings, fund a tender offer of up to $1.05 billion for existing notes, and for general corporate purposes.

When is the expected closing date for DINO's senior notes offering?

The senior notes offering is expected to close on January 23, 2025, subject to customary closing conditions.