HF Sinclair Corporation (NYSE: DINO) (“HF
Sinclair”) and Holly Energy Partners, L.P. (NYSE: HEP)
(“HEP”) today announced that as of
5:00 p.m., New York City time, on November 13, 2023 (the
“Early Participation Date”), that
$880,229,000 in aggregate principal amount of outstanding HEP Notes
(as defined below) previously issued by HEP and Holly Energy
Finance Corp. (“Finance Corp.” and,
together with HEP, the “HEP Issuers”),
representing approximately 97.80% of the total outstanding
principal amount of the HEP Notes, have been validly tendered and
not validly withdrawn (and consents thereby validly given and not
validly withdrawn) in connection with its previously announced
private exchange offers (each an “Exchange
Offer” and, collectively, the “Exchange Offers”) and related consent
solicitations (collectively, the “Consent
Solicitations”) and that the following Early Participation
Exchange Consideration (as defined below) in respect of each $1,000
principal amount of such HEP Notes if accepted for purchase is to
be paid:
Title of Series of HEP
Notes
CUSIPs
ISIN No.
Early Participation Exchange
Consideration
Principal Amount
Tendered
Percentage Tendered
6.375% Senior Notes due 2027
144A: 435765AJ1 /
Reg S: U4377TAG5
144A: US435765AJ10 / Reg S:
USU4377TAG59
$1,000 principal amount of HF Sinclair’s
6.375% Senior Notes due 2027 and $1.00 in cash
$
394,226,000
98.56%
5.000% Senior Notes due 2028
144A: 435765AH5 /
Reg S: U4377TAF7
144A: US435765AH53 / Reg S:
USU4377TAF76
$1,000 principal amount of HF Sinclair’s
5.000% Senior Notes due 2028 and $1.00 in cash
$
486,003,000
97.20%
Total:
$
880,229,000
97.80%
As of 11:00 a.m., New York City time, on November 10, 2023, HF
Sinclair, on behalf of the HEP Issuers, had received valid consents
from at least a majority of the outstanding aggregate principal
amount of the 6.375% Senior Notes due 2027 (the “2027 Notes”) and the 5.000% Senior Notes due 2028
(the “2028 Notes” and, together with
the 2027 Notes, the “HEP Notes”),
which amounts were sufficient to constitute the requisite consents
to approve the Proposed Amendments (as defined below) to amend the
indentures governing the HEP Notes (the “HEP
Indentures” and each an “HEP
Indenture”). On November 10, 2023, the HEP Issuers entered
into supplemental indentures implementing certain proposed
amendments to, among other things, eliminate from each HEP
Indenture, as it relates to each series of HEP Notes (i)
substantially all of the restrictive covenants, (ii) certain of the
events which may lead to an “Event of Default”, (iii) the U.S.
Securities and Exchange Commission (the “SEC”) reporting covenant and (iv) the requirement
of HEP to offer to purchase the HEP Notes upon a change of control
(collectively, the “Proposed
Amendments”). The supplemental indentures implementing the
Proposed Amendments were effective upon execution but will only
become operative upon the Settlement Date (as defined below) of the
applicable Exchange Offer. Eligible Holders (as defined below) may
no longer withdraw tendered HEP Notes or revoke consents, except as
required by applicable law.
HF Sinclair has also announced that the previous deadline for
holders to tender their HEP Notes and be eligible to receive $1,000
principal amount of such series of new notes to be issued by HF
Sinclair (the “New Notes”), which
includes an early participation premium, payable in principal
amount of New Notes, of $50, plus a payment of $1.00 in cash
(together, the “Early Participation Exchange
Consideration”) has been extended to the Expiration Date.
Currently, this is the same time and date as the Expiration Date
(as defined below) for the Exchange Offers and Consent
Solicitations. As a result, the consideration to be paid for HEP
Notes validly tendered (i) at or prior to the Early Participation
Date and (ii) following the Early Participation Date, but at or
prior to the Expiration Date, will be the same.
HEP Notes validly tendered and not validly withdrawn and that
are accepted for exchange will be exchanged for New Notes on the
Settlement Date, which is expected to be on or about December 4,
2023, and the applicable consideration will be paid to the Eligible
Holders of such HEP Notes on such date, unless the Exchange Offers
and Consent Solicitations are extended or terminated.
The Exchange Offers and Consent Solicitations are being made
pursuant to the terms and subject to the conditions set forth in
the confidential offering memorandum and consent solicitation
statement, dated as of October 30, 2023 (the “Exchange Offer Memorandum”). Each Exchange Offer
and Consent Solicitation will expire at 5:00 p.m., New York City
time, on November 29, 2023, unless extended or earlier terminated
(such date and time, as they may be extended or earlier terminated,
the “Expiration Date”). Settlement of
the Exchange Offers is expected to be on or about the third
business day following the Expiration Date (the “Settlement Date”), and is expected to be on or
about December 4, 2023, unless HF Sinclair extends the Expiration
Date or terminates the Exchange Offers. HF Sinclair, in its sole
discretion, subject to applicable law, reserves the right to
terminate, withdraw, amend or extend one or more of the Exchange
Offers and Consent Solicitations in its discretion, subject to the
terms and conditions set forth in the Exchange Offer
Memorandum.
Each series of New Notes will have substantially identical
interest rate, interest payment dates, maturity date and redemption
terms as the corresponding series of HEP Notes. The first interest
payment on any New Notes will include the accrued and unpaid
interest on the HEP Notes tendered in exchange therefor so that a
tendering Eligible Holder will receive the same interest payment it
would have received had its HEP Notes not been tendered in the
Exchange Offers and Consent Solicitations; provided that the amount
of accrued and unpaid interest shall only be equal to the accrued
and unpaid interest on the principal amount of HEP Notes equal to
the aggregate principal amount of New Notes an Eligible Holder
receives.
In addition, each Exchange Offer and Consent Solicitation is
subject to certain conditions such as, among other things,
completion of the Proposed Merger (as defined below), which
condition may not be waived by HF Sinclair, and the receipt of the
requisite consents necessary to effect the Proposed Amendments to
each of the HEP Indentures (which consents were received on
November 10, 2023 as discussed above). HF Sinclair may generally
waive any such conditions at any time, and any waiver of a
condition by HF Sinclair with respect to an Exchange Offer will
automatically waive such condition with respect to the
corresponding Consent Solicitation, as applicable. In addition, HF
Sinclair may amend the terms of any Exchange Offer without amending
the terms of any other Exchange Offer.
This press release does not constitute an offer to sell or
purchase, or a solicitation of an offer to sell or purchase, or the
solicitation of tenders or consents with respect to, any security.
No offer, solicitation, purchase or sale will be made in any
jurisdiction in which such an offer, solicitation or sale would be
unlawful.
The New Notes offered in the Exchange Offers have not been
registered with the SEC under the Securities Act of 1933, as
amended (the “Securities Act”), or any
state or foreign securities laws. Accordingly, the New Notes will
be subject to restrictions on transferability and resale and may
not be transferred or resold except as permitted under the
Securities Act and other applicable securities laws, pursuant to
registration or exemption therefrom. The New Notes may not be
offered or sold in the United States or to any U.S. persons except
pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act. Only persons
who properly complete and return the eligibility certification (the
“Eligibility Letter”), which is
available from the Information Agent (as defined herein),
certifying that they are (i) “qualified institutional buyers”
within the meaning of Rule 144A under the Securities Act or (ii)
persons outside of the “United States” that are (a) not “U.S.
persons,” as that term is defined in Rule 902 under the Securities
Act in offshore transactions in compliance with Regulation S under
the Securities Act, (b) not acting for the account or benefit of a
U.S. person and (c) (x) if a resident in a member state of the
European Economic Area, such person is not a “retail investor” (as
defined in the Eligibility Letter), (y) if a resident in the United
Kingdom, such person is not a “retail investor” and such person is
a “relevant person” (as defined in the Eligibility Letter) or (z)
if a resident in Canada, such person is a “non-U.S. qualified
offeree” (as defined in the Eligibility Letter) are authorized to
receive and review the Exchange Offer Memorandum (such persons,
“Eligible Holders”). Only Eligible
Holders who have completed and returned an Eligibility Letter,
available from the Information Agent, are authorized to receive or
review the Exchange Offer Memorandum or to participate in the
Exchange Offers and Consent Solicitations. HF Sinclair will also
enter into a registration rights agreement with the dealer
managers, for the benefit of the holders of the New Notes.
Holders who desire to obtain a copy of the Eligibility Letter
should contact D.F. King & Co., Inc., the information and
exchange agent for the Exchange Offers and Consent Solicitations
(the “Information Agent”), at (800)
992-3086 (toll-free) or (212) 269-5550 (banks and brokers), at
www.dfking.com/hfsinclair or by email at hfc@dfking.com. D.F. King
& Co., Inc. will also provide copies of the Exchange Offer
Memorandum to Eligible Holders.
Questions concerning the terms of the Exchange Offers or the
Consent Solicitations should be directed to the dealer managers for
the Exchange Offers and the solicitation agents for the Consent
Solicitations:
BofA Securities
Wells Fargo Securities
620 South Tryon Street, 20th
Floor
Charlotte, North Carolina
28255
Toll Free: (888) 292-0070
Collect: (980) 387-3907
E-mail:
debt_advisory@bofa.com
Attn: Liability Management
550 South Tryon Street, 5th
Floor
Charlotte, North Carolina
28202
Toll Free: (866) 309-6316
Collect: (704) 410-4235
Email:
liabilitymanagement@wellsfargo.com
Attn: Liability Management
Group
The Exchange Offers and Consent Solicitations are being made
only pursuant to the Exchange Offer Memorandum. The Exchange Offer
Memorandum and other documents relating to the Exchange Offers and
Consent Solicitations will be distributed only to Eligible Holders.
The Exchange Offers are not being made to holders of HEP Notes in
any jurisdiction in which the making or acceptance thereof would
not be in compliance with the securities, blue sky or other laws of
such jurisdiction. The New Notes have not been approved or
disapproved by any regulatory authority, nor has any such authority
passed upon the accuracy or adequacy of the Exchange Offer
Memorandum.
None of HF Sinclair, HF Sinclair’s subsidiaries, its and their
respective directors or officers, the dealer managers and
solicitation agents, the exchange agent, the information agent, any
trustee for the New Notes or the HEP Notes, their respective
affiliates, or any other person is making any recommendation as to
whether holders should tender their HEP Notes in the Exchange
Offers or deliver consents to the Proposed Amendments.
ABOUT HF SINCLAIR CORPORATION AND HOLLY ENERGY PARTNERS,
L.P.
HF Sinclair Corporation, headquartered in Dallas, Texas, is an
independent energy company that produces and markets high-value
light products such as gasoline, diesel fuel, jet fuel, renewable
diesel and other specialty products. HF Sinclair owns and operates
refineries located in Kansas, Oklahoma, New Mexico, Wyoming,
Washington and Utah and markets its refined products principally in
the Southwest U.S., the Rocky Mountains extending into the Pacific
Northwest and in other neighboring Plains states. HF Sinclair
supplies high-quality fuels to more than 1,500 branded stations and
licenses the use of the Sinclair brand at more than 300 additional
locations throughout the country. In addition, subsidiaries of HF
Sinclair produce and market base oils and other specialized
lubricants in the U.S., Canada and the Netherlands, and export
products to more than 80 countries. Through its subsidiaries, HF
Sinclair produces renewable diesel at two of its facilities in
Wyoming and also at its facility in Artesia, New Mexico. HF
Sinclair also owns a 47% limited partner interest and a
non-economic general partner interest in Holly Energy Partners,
L.P., a master limited partnership that provides petroleum product
and crude oil transportation, terminalling, storage and throughput
services to the petroleum industry, including HF Sinclair
subsidiaries.
Holly Energy Partners, L.P., headquartered in Dallas, Texas,
provides petroleum product and crude oil transportation,
terminalling, storage and throughput services to the petroleum
industry, including subsidiaries of HF Sinclair Corporation. HEP,
through its subsidiaries and joint ventures, owns and/or operates
petroleum product and crude pipelines, tankage and terminals in
Colorado, Idaho, Iowa, Kansas, Missouri, Nevada, New Mexico,
Oklahoma, Texas, Utah, Washington and Wyoming, as well as refinery
processing units in Kansas and Utah.
FORWARD-LOOKING STATEMENTS
The statements in this press release relating to matters that
are not historical facts are “forward-looking statements” based on
management’s beliefs and assumptions using currently available
information and expectations as of the date hereof, are not
guarantees of future performance and involve certain risks and
uncertainties, including those contained in HF Sinclair’s and HEP’s
filings with the SEC. Forward-looking statements use words such as
“anticipate,” “project,” “will,” “expect,” “plan,” “goal,”
“forecast,” “strategy,” “intend,” “should,” “would,” “could,”
“believe,” “may,” and similar expressions and statements regarding
HF Sinclair’s and HEP’s plans and objectives for future operations
or the Proposed Merger. Although HF Sinclair and HEP believe that
the expectations reflected in these forward-looking statements are
reasonable, HF Sinclair and HEP cannot assure you that HF
Sinclair’s and HEP’s expectations will prove to be correct.
Therefore, actual outcomes and results could materially differ from
what is expressed, implied or forecast in such statements. Any
differences could be caused by a number of factors, including, but
not limited to, the ability of HF Sinclair or HEP to consummate the
Proposed Merger; the risk that the Proposed Merger does not occur;
negative effects from the pendency of the Proposed Merger; the time
required to consummate the Proposed Merger; the risk that cost
savings, tax benefits and any other synergies from the Proposed
Merger may not be fully realized or may take longer to realize than
expected; disruption from the Proposed Merger may make it more
difficult to maintain relationships with customers, employees or
suppliers; the possibility that the market price of HF Sinclair
common stock will fluctuate prior to the completion of the Proposed
Merger causing the value of the merger consideration of the
Proposed Merger to change; the risk that certain officers and
directors of HF Sinclair and HEP have interests in the Proposed
Merger that are different from, or in addition to, the interests
they may have as a HF Sinclair stockholder or a HEP unitholder,
respectively; the possibility that financial projections by HF
Sinclair may not prove to be reflective of actual future results;
failure to obtain the required approvals for the Proposed Merger;
the focus of management time and attention on the Proposed Merger
and other disruptions arising from the Proposed Merger; legal
proceedings that may be instituted against HF Sinclair or HEP in
connection with the Proposed Merger; HF Sinclair’s and HEP’s
ability to successfully integrate the Sinclair Oil Corporation (now
known as Sinclair Oil LLC) and Sinclair Transportation Company LLC
businesses acquired from The Sinclair Companies (now known as REH
Company) (collectively, the “Sinclair Transactions”) with their
existing operations and fully realize the expected synergies of the
Sinclair Transactions or on the expected timeline; HF Sinclair’s
ability to successfully integrate the operation of the Puget Sound
refinery with its existing operations; the demand for and supply of
crude oil and refined products, including uncertainty regarding the
increasing societal expectations that companies address climate
change; risks and uncertainties with respect to the actions of
actual or potential competitive suppliers and transporters of
refined petroleum products or lubricant and specialty products in
HF Sinclair’s markets; the spread between market prices for refined
products and market prices for crude oil; the possibility of
constraints on the transportation of refined products or lubricant
and specialty products; the possibility of inefficiencies,
curtailments or shutdowns in refinery operations or pipelines,
whether due to reductions in demand, accidents, unexpected leaks or
spills, unscheduled shutdowns, infection in the workforce, weather
events, global health events, civil unrest, expropriation of
assets, and other economic, diplomatic, legislative, or political
events or developments, terrorism, cyberattacks, or other
catastrophes or disruptions affecting HF Sinclair’s operations,
production facilities, machinery, pipelines and other logistics
assets, equipment, or information systems, or any of the foregoing
of HF Sinclair’s suppliers, customers, or third-party providers,
and any potential asset impairments resulting from, or the failure
to have adequate insurance coverage for or receive insurance
recoveries from, such actions; the effects of current and/or future
governmental and environmental regulations and policies, including
increases in interest rates; the availability and cost of financing
to HF Sinclair; the effectiveness of HF Sinclair’s capital
investments and marketing strategies; HF Sinclair’s and HEP’s
efficiency in carrying out and consummating construction projects,
including HF Sinclair’s ability to complete announced capital
projects on time and within capital guidance; HF Sinclair’s and
HEP’s ability to timely obtain or maintain permits, including those
necessary for operations or capital projects; the ability of HF
Sinclair to acquire refined or lubricant product operations or
pipeline and terminal operations on acceptable terms and to
integrate any existing or future acquired operations; the
possibility of terrorist or cyberattacks and the consequences of
any such attacks; uncertainty regarding the effects and duration of
global hostilities, including the Israel-Gaza conflict, the
Russia-Ukraine war, and any associated military campaigns which may
disrupt crude oil supplies and markets for HF Sinclair’s refined
products and create instability in the financial markets that could
restrict HF Sinclair’s ability to raise capital; general economic
conditions, including economic slowdowns caused by a local or
national recession or other adverse economic condition, such as
periods of increased or prolonged inflation; the outcome of the
Exchange Offers and Consent Solicitations; and other business,
financial, operational and legal risks and uncertainties detailed
from time to time in HF Sinclair’s and HEP’s SEC filings, whether
or not related to the Exchange Offers and Consent Solicitations.
The forward-looking statements speak only as of the date made and,
other than as required by law, HF Sinclair and HEP undertake no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
ADDITIONAL INFORMATION AND WHERE YOU CAN FIND IT
This report does not constitute a solicitation of any vote or
approval with respect to the proposed merger contemplated by that
certain Agreement and Plan of Merger, dated August 15, 2023, by and
between HF Sinclair, HEP, Navajo Pipeline Co., L.P., Holly Apple
Holdings LLC (“Merger Sub”), HEP
Logistics Holdings, L.P. and Holly Logistic Services, L.L.C.,
pursuant to which Merger Sub will merge with and into HEP, with HEP
surviving as an indirect, wholly owned subsidiary of HF Sinclair
(the “Proposed Merger”). In connection
with the Proposed Merger, HF Sinclair has filed with the SEC a
registration statement on Form S-4 that includes a joint proxy
statement of HF Sinclair and HEP and also constitutes a prospectus
of HF Sinclair (the “Registration
Statement”), which includes a joint proxy statement of HF
Sinclair and HEP and also constitutes a prospectus of HF Sinclair,
which was declared effective on October 24, 2023. HF Sinclair and
HEP may also file other materials with the SEC regarding the
Proposed Merger. Mailing of the definitive joint proxy
statement/prospectus to the securityholders of HF Sinclair and HEP
commenced on October 26, 2023. INVESTORS AND SECURITYHOLDERS OF HF
SINCLAIR AND HEP ARE ADVISED TO CAREFULLY READ THE REGISTRATION
STATEMENT, THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER
DOCUMENTS THAT HAVE BEEN FILED OR MAY BE FILED WITH THE SEC
(INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER, THE
PARTIES TO THE PROPOSED MERGER AND THE RISKS ASSOCIATED WITH THE
PROPOSED MERGER. Investors and securityholders may obtain a free
copy of such documents and other relevant documents (if and when
available) filed by HF Sinclair or HEP with the SEC from the SEC’s
website at www.sec.gov. Securityholders and other interested
parties will also be able to obtain, without charge, a copy of such
documents and other relevant documents (if and when available) from
HF Sinclair’s website at www.hfsinclair.com under the Investor
Relations page or from HEP’s website at www.hollyenergy.com on the
Investors page.
NO OFFER OR SOLICITATION
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation, or sale would
be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act.
PARTICIPANTS IN THE SOLICITATION OF PROXIES
HF Sinclair, HEP and their respective directors, executive
officers and certain other members of management may be deemed to
be participants in the solicitation of proxies in respect of the
Proposed Merger. Information about these persons is set forth in
the Registration Statement, including the joint proxy
statement/prospectus, which was filed by HF Sinclair with the SEC
on October 16, 2023 and declared effective by the SEC on October
24, 2023; HF Sinclair’s proxy statement relating to its 2023 Annual
Meeting of Stockholders, which was filed with the SEC on April 6,
2023; HF Sinclair’s Annual Report on Form 10-K for the year ended
December 31, 2022, which was filed with the SEC on February 28,
2023; HEP’s Annual Report on Form 10-K for the year ended December
31, 2022, which was filed with the SEC on February 28, 2023, and
subsequent statements of changes in beneficial ownership on file
with the SEC. Securityholders and investors may obtain additional
information regarding the interests of such persons, which may be
different than those of the respective companies’ securityholders
generally, by reading the Registration Statement, including the
joint proxy statement/prospectus, and other relevant documents
regarding the Proposed Merger (if and when available), which will
be filed with the SEC.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231113815331/en/
HF Sinclair Corporation Holly Energy Partners,
L.P. Craig Biery, 214-954-6510 Vice President, Investor
Relations or Trey Schonter, 214-954-6510 Manager, Investor
Relations
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