MPLX LP plans to exchange up to $3.25 billion of senior notes issued by its subsidiaries Andeavor Logistics LP and Tesoro Logistics Finance Corp. for new MPLX notes.
MPLX would exchange all outstanding 6.250% senior notes due 2022, 3.500% senior notes due 2022, 6.375% senior notes due 2024, 5.250% senior notes due 2025, 4.250% senior notes due 2027, and 5.200% senior notes due 2047, according to an Aug. 22 news release.
Noteholders will get $1,000 principal amount of new MPLX notes and $1 in cash in exchange for each $1,000 principal amount of existing Andeavor notes validly tendered on or before Sept. 5. Because of an early tender premium of $30, those whose notes are validly tendered after Sept. 5 but before the expiration date will get $970 principal amount of MPLX notes and $1 in cash.
In addition to the exchange offers, Andeavor and Tesoro are seeking consents to adopt proposed amendments, including the removal of certain covenants, restrictive provisions, events of default, as well as the requirement for subsidiaries to make guarantees.
The exchange offers and consent solicitations commenced Aug. 22 and will expire Sept. 19, unless extended. The settlement date is expected by Sept. 21.
MPLX plans to issue debt in the near term, with proceeds to be used to repay these notes at maturity and for general partnership purposes. The company also plans to pay back a portion of debt currently outstanding under its revolving credit facility and/or the intercompany loan with its parent company Marathon Petroleum Corp.
On July 30, MPLX closed its acquisition of Andeavor in a unit-for-unit deal worth about $9 billion in equity value and $14 billion in enterprise value. The transaction involves the assumption of roughly $5 billion of debt.
