Sunoco LP and Sunoco Finance Corp. launched consent solicitations for changes to be made to the indentures governing some of their senior notes worth $1.6 billion.
The consent solicitations are for Sunoco's $800 million of 6.250% senior notes due 2021 and $800 million of 6.375% senior notes due 2023, to holders of record as of Oct. 6. Through the consent solicitations, Sunoco is moving toward the completion of its $3.3 billion divestiture of a majority of its retail fuel outlets to 7-Eleven Inc. Sunoco's proposed amendments would eliminate requirements to make a change of control offer at 101% of par or an asset sale offer at 100% of par after the deal closing, according to an Oct. 10 news release.
The consent solicitations are scheduled to expire on Oct. 18. Holders who validly deliver consents before the expiration date stand to receive a $10 cash fee for every $1,000 of senior notes they own. Under the proposed amendments, Sunoco would not be allowed to optionally redeem the 2021 notes until April 15, 2019, and the 2023 notes until April 1, 2020. Holders would also be given the right to require Sunoco to repurchase the 2021 notes at 101.563% of the principal amount in 2019, and the 2023 notes at 101.594% of the principal amount in 2020, both with interest.
In connection to the 7-Eleven deal, Sunoco issued a notice of redemption for $600 million of its 5.5% senior notes due 2020, pending deal completion. The notes would be redeemed at 102.750% of the principal amount, plus interest. The transaction is expected to close in the fourth quarter.
Bank of America Merrill Lynch is acting as the solicitation agent for the consent solicitations. Sunoco is a subsidiary of Energy Transfer Equity LP, which owns its general partner and incentive distribution rights.