Sunoco $1B 5.5NC2 5.625%, $900M 8.5NC3 5.875% launch

Sunoco $1B 5.5NC2 5.625%, $900M 8.5NC3 5.875% launch

Sunoco LP (SUN) has launched a $1 billion private offering of Series A Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Units to support its planned acquisition of Parkland Corporation. The offering consists of 1 million units priced at $1,000 each, with proceeds intended to fund the cash portion of the acquisition and related transaction costs [1].

In addition to the preferred units, Sunoco has also announced two private senior notes offerings totaling $1.7 billion. The offerings include $850 million in senior notes due in 2031 and $850 million in senior notes due in 2034. These funds will also contribute to the cash consideration and transaction costs associated with the acquisition [2].

The funds raised through these offerings will be used to temporarily reduce Sunoco's borrowings under its revolving credit facility and cover related costs until the deal closes. If the acquisition does not close by May 5, 2026, or is terminated earlier, the Series A Preferred Units will be subject to a mandatory redemption at $1,000 per unit plus accrued and unpaid distributions. The senior notes will be redeemed at 100% of the issue price plus accrued interest if the acquisition is not completed by the specified dates [1, 2].

Sunoco currently trades at $51.36 on the NYSE, representing a 0.47% decrease from its previous price [1].

References:
[1] https://www.nasdaq.com/articles/sunoco-launches-1-bln-private-offering-series-preferred-units
[2] https://seekingalpha.com/news/4492305-sunoco-launches-17b-senior-notes-1b-preferred-offering-to-fund-parkland-acquisition