Delek US plans $400m convertible notes offering due 2031

Brentwood, Tennessee - Delek US Holdings, a major player in the energy sector, has announced plans to raise $400 million through the issuance of convertible senior notes due in 2031. The company intends to sell these securities to qualified institutional buyers in a private placement, as per a press release. The notes will be backed by subsidiaries that guarantee either Delek's senior secured term loan facility or an asset-based revolving credit facility.

Investors have the option to buy up to an additional $60 million within 13 days of the initial closing. The primary use of the funds raised will be to finance capped call transactions, which aim to minimize potential dilution to common stock when the notes get converted. The rest of the proceeds will be used for general corporate purposes, including repaying some of the outstanding debts under the term loan credit facility, along with accrued interest and related fees.

These notes will come due on November 1, 2031, unless they are converted, redeemed, or repurchased earlier. Before August 1, 2031, the notes can only be converted under specific conditions, with the company having the option to pay cash or issue common stock in lieu of the conversion. Redemption of the notes before November 6, 2029, is not permitted, except for a cleanup redemption if less than 10% of the original principal amount remains outstanding.

Post-November 6, 2029, the notes can be redeemed in full or partial amounts based on certain conditions. The interest rate and the initial conversion rate will be decided at the time of pricing. Delek US Holdings is involved in petroleum refining, logistics, pipelines, and renewable fuels, with refineries in Texas, Arkansas, and Louisiana boasting a combined nameplate crude throughput capacity of 302,000 barrels per day.

This announcement was made with the assistance of AI technology and subsequently reviewed by an editor.