Marathon Petroleum Corp. prices $2.0 billion senior notes offering

Rhea-AI Summary

Marathon Petroleum (NYSE: MPC) has announced pricing for a $2.0 billion senior notes offering, comprising $1.1 billion of 5.15% senior notes due 2030 and $900 million of 5.70% senior notes due 2035. The proceeds will be used to repay the company's outstanding $1.25 billion of 4.700% senior notes due May 2025 and for general corporate purposes.

The offering is expected to close on February 10, 2025, subject to customary conditions. Wells Fargo Securities, Citigroup Global Markets, and MUFG Securities Americas are serving as joint book-running managers for the offering.

Positive

• Successful pricing of $2.0 billion in senior notes offering
• Debt restructuring with potentially better terms (new notes at 5.15% and 5.70% vs. existing 4.700%)
• Extended debt maturity profile to 2030 and 2035

Negative

• Increased interest expense with higher rates on new notes

Insights

Fixed Income Analyst

Marathon Petroleum's $2.0 billion senior notes offering represents a strategic debt restructuring move that merits careful analysis. The company is effectively managing its debt maturity profile by replacing $1.25 billion of maturing notes (4.70% due May 2025) with longer-dated securities, split between 5-year and 10-year terms.

The pricing structure reveals interesting market dynamics:

• The 5.15% rate for 2030 notes and 5.70% for 2035 notes reflects the current interest rate environment and MPC's credit quality
• The 45 basis point spread between the two tranches indicates relatively modest term premium, suggesting market confidence in MPC's long-term creditworthiness
• The timing is opportunistic, as it addresses the upcoming May 2025 maturity well in advance, reducing refinancing risk

While the new notes carry higher interest rates than the maturing debt, this refinancing provides several strategic advantages:

• Extended maturity profile reduces near-term refinancing pressure
• Additional $750 million in proceeds enhances financial flexibility
• Staggered maturities (2030/2035) help distribute future refinancing needs

The successful placement of these notes, supported by major financial institutions, demonstrates strong market appetite for MPC's debt securities and confirms the company's robust access to capital markets. This transaction strengthens MPC's liquidity position while maintaining a manageable leverage profile.

FINDLAY, Ohio, Feb. 6, 2025 /PRNewswire/ -- Marathon Petroleum Corporation (NYSE: MPC) announced today that it has priced $2.0 billion in aggregate principal amount of unsecured senior notes in an underwritten public offering consisting of $1.1 billion aggregate principal amount of 5.15% senior notes due 2030 and $900 million aggregate principal amount of 5.70% senior notes due 2035.

MPC intends to use the net proceeds from this offering to repay, redeem or otherwise retire its outstanding $1.25 billion aggregate principal amount of 4.700% senior notes due May 2025 and for general corporate purposes.

The closing of this offering is expected to occur on February 10, 2025, subject to satisfaction of customary closing conditions.

Wells Fargo Securities, LLC, Citigroup Global Markets Inc. and MUFG Securities Americas Inc. are acting as joint book-running managers for the offering.

MPC has filed a registration statement (including a prospectus and related preliminary prospectus supplement for the offering) with the Securities and Exchange Commission (the "SEC") for the offering to which this communication relates. Before investing, investors should read the preliminary prospectus supplement, the accompanying prospectus in that registration statement and the other documents MPC has filed with the SEC for more complete information about MPC and this offering. Investors may get these documents for free by visiting EDGAR on the SEC's website at www.sec.gov. Alternatively, MPC, any underwriter or any dealer participating in the offering will arrange to send investors the preliminary prospectus supplement and the accompanying prospectus upon request by contacting the following, which are acting as representatives of the underwriters:

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

Citigroup Global Markets Inc.
Attn: Broadridge Financial Solutions
1155 Long Island Avenue
Edgewood, NY 11717
Toll-free: 1-800-831-9146
Email: prospectus@citi.com

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

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

About Marathon Petroleum Corporation

Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system. MPC's marketing system includes branded locations across the United States, including Marathon brand retail outlets. MPC also owns the general partner and majority limited partner interest in MPLX LP, a midstream company that owns and operates gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure.

Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President Finance and Investor Relations
Brian Worthington, Director, Investor Relations
Alyx Teschel, Manager, Investor Relations

Media Contact: (419) 421-3577
Jamal Kheiry, Communications Manager

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SOURCE Marathon Petroleum Corporation

FAQ

What is the size and structure of MPC's February 2025 senior notes offering?

MPC's offering totals $2.0 billion, consisting of $1.1 billion in 5.15% senior notes due 2030 and $900 million in 5.70% senior notes due 2035.

How will MPC use the proceeds from its $2.0 billion notes offering?

MPC will use the proceeds to repay its $1.25 billion of 4.700% senior notes due May 2025 and for general corporate purposes.

When is MPC's new senior notes offering expected to close?

The offering is expected to close on February 10, 2025, subject to customary closing conditions.

Which banks are managing MPC's 2025 senior notes offering?

Wells Fargo Securities, Citigroup Global Markets, and MUFG Securities Americas are acting as joint book-running managers for the offering.

What are the interest rates on MPC's new senior notes?

The new senior notes carry interest rates of 5.15% for the 2030 notes and 5.70% for the 2035 notes.