Andeavor Logistics LP completed an inaugural investment-grade public offering of senior notes totaling $1.75 billion, which the partnership intends to use to repay debt under its drop-down credit facility.
S&P Global Ratings upgraded Andeavor Logistics to investment-grade status following its acquisition of Western Refining Logistics LP. The partnership's offering was composed of $500 million of 3.5% senior notes due 2022, priced at 99.690%; $750 million of 4.25% senior notes due 2027, priced at 99.822%; and $500 million of 5.2% senior notes due 2047, priced at 99.668%, according to a Nov. 28 news release.
With the sale, Andeavor Logistics expects to cut its annual interest costs by more than $25 million, according to Steven Sterin, president and CFO of Andeavor Logistics' general partner. The net proceeds would also be used to redeem all of Andeavor Logistics' outstanding 5.875% senior notes due 2020 and 6.125% senior notes due 2021, as well as for general partnership purposes.
Merrill Lynch Pierce Fenner & Smith Inc., Goldman Sachs & Co. LLC, Credit Suisse Securities (USA) LLC, Wells Fargo Securities LLC, Deutsche Bank Securities Inc., MUFG Securities Americas Inc., TD Securities (USA) LLC and U.S. Bancorp Investments Inc. acted as joint book-running managers.
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