Sunoco LP Announces Pricing of Upsized Private Offering of Senior Notes

Rhea-AI Summary

Sunoco LP (NYSE: SUN) has successfully priced an upsized private offering of senior notes at 100%. The offering consists of $1 billion in 6.250% senior notes due 2033, increased from the initial offering size of $750 million.

The sale is expected to settle on March 31, 2025, subject to customary closing conditions. The proceeds will be used to repay existing debt, including the full redemption of NuStar Logistics' 5.750% senior notes due 2025 and partial repayment of Sunoco's revolving credit facility.

The notes will be offered exclusively to qualified institutional buyers under Rule 144A and non-U.S. persons under Regulation S of the Securities Act, as the offering has not been registered under the Securities Act of 1933.

Positive

• Successful upsizing of offering from $750M to $1B indicates strong investor demand
• Debt refinancing could potentially improve interest expense management
• Strategic debt restructuring through redemption of existing notes and credit facility repayment

Negative

• Additional $1B in long-term debt increases overall debt burden
• Higher interest rate of 6.250% compared to existing 5.750% NuStar notes being redeemed

Insights

Financial Analyst

Sunoco's $1 billion senior notes offering represents significant debt restructuring that extends their maturity profile by 8 years, from 2025 to 2033. The upsizing from $750 million demonstrates strong market demand, suggesting investor confidence in Sunoco's long-term creditworthiness despite the higher 6.250% interest rate compared to NuStar's 5.750% notes being redeemed.

This refinancing serves dual strategic purposes: eliminating the approaching maturity of the NuStar 2025 notes and reducing revolving credit facility borrowings. While the higher coupon rate will increase fixed interest expenses, reducing revolving credit exposure provides greater financial flexibility and predictability in the company's debt service obligations.

The successful placement of these notes effectively pushes major debt obligations further into the future, which strengthens Sunoco's near-term liquidity position. This transaction appears designed to optimize the capital structure following their NuStar acquisition, consolidating debt under Sunoco's corporate umbrella while extending maturity timelines.

Without knowing the specific interest rates on the revolving facility being paid down, it's unclear whether this transaction will be interest expense neutral, but the market's willingness to absorb an upsized offering signals confidence in Sunoco's financial management and business model stability.

DALLAS, March 20, 2025 /PRNewswire/ -- Sunoco LP (NYSE: SUN) ("Sunoco" or the "Partnership") today announced that it has priced at 100% a private offering (the "offering") of 6.250% senior notes due 2033 in an aggregate principal amount of $1 billion (the "notes"). This offering was upsized from an initial offering size of $750 million aggregate principal amount. The sale of the notes is expected to settle on March 31, 2025, subject to the satisfaction of customary closing conditions.

Sunoco intends to use the net proceeds from the offering to repay indebtedness, including by redeeming in full NuStar Logistics, L.P.'s 5.750% senior notes due 2025 (the "NuStar 2025 Notes") and repaying a portion of the outstanding borrowings under Sunoco's revolving credit facility.

The offering of the notes has not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and, unless so registered, the notes may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Sunoco plans to offer and sell the notes only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act.

This news release is neither an offer to sell nor a solicitation of an offer to buy the notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the notes or any other securities in any jurisdiction in which such offer, solicitation or sale is unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction. Additionally, this news release shall not constitute a notice of redemption under the indenture governing the NuStar 2025 Notes.

About Sunoco LP

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 with 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).

Forward-Looking Statements

This news release may include certain statements concerning expectations for the future that are forward-looking statements as defined by federal law, including without limitation statements regarding the offering. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties, and other factors that are difficult to predict and many of which are beyond management's control. An extensive list of factors that can affect future results are discussed in Sunoco's Annual Report on Form 10-K and any other documents filed from time to time with the Securities and Exchange Commission. Sunoco undertakes no obligation to update or revise any forward-looking statement to reflect new information or events.

Contacts 
Scott Grischow
Treasurer, Senior Vice President – Finance
(214) 840-5660, scott.grischow@sunoco.com

Erik Gulbrandsen
Director – Investor Relations and Capital Markets
(214) 840-5684, erik.gulbrandsen@sunoco.com

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SOURCE Sunoco LP

FAQ

What is the size and interest rate of Sunoco LP's (SUN) new senior notes offering?

Sunoco LP's new senior notes offering is $1 billion with a 6.250% interest rate, due 2033. This was upsized from the initial $750 million offering.

When will Sunoco's (SUN) new senior notes offering settle?

The senior notes offering is expected to settle on March 31, 2025, subject to customary closing conditions.

How will Sunoco (SUN) use the proceeds from the senior notes offering?

The proceeds will be used to repay debt, including redeeming NuStar Logistics' 5.750% senior notes due 2025 and partially repaying Sunoco's revolving credit facility.

Who can purchase Sunoco's (SUN) new senior notes?

The notes are only available to qualified institutional buyers under Rule 144A and non-U.S. persons under Regulation S of the Securities Act.