HF Sinclair Corporation (NYSE: DINO) (“HF
Sinclair”) and Holly Energy Partners, L.P. (NYSE: HEP)
(“HEP”) today announced the expiration
and final results of the previously announced (i) private offers to
exchange (each an “Exchange Offer”
and, collectively, the “Exchange
Offers”) any and all outstanding (a) 6.375% Senior Notes due
2027 (the “2027 Notes”) and (b) 5.000%
Senior Notes due 2028 (the “2028
Notes” and, together with the 2027 Notes, the “HEP Notes”) previously issued by HEP and Holly
Energy Finance Corp. (“Finance Corp.”
and, together with HEP, the “HEP
Issuers”) for new notes to be issued by HF Sinclair (the
“New Notes”), with registration
rights, and cash, and (ii) consent solicitations (collectively, the
“Consent Solicitations”) to adopt the
Proposed Amendments (as defined below) to the indentures governing
the HEP Notes (each an “HEP Indenture”
and, collectively, the “HEP
Indentures”), commenced by HF Sinclair on October 30, 2023.
The Exchange Offers and Consent Solicitations expired at 5:00 p.m.,
New York City time, on November 29, 2023 (the “Expiration Date”). The below table reflects the
aggregate principal amounts of each respective series of HEP Notes
that had been validly tendered and not validly withdrawn as of the
Expiration Date:
Title of Series of HEP
Notes
CUSIPs
ISIN No.
Principal Amount
Tendered
Percentage Tendered
6.375% Senior Notes due
2027..............................................
144A: 435765AJ1 /
Reg S: U4377TAG5
144A: US435765AJ10 / Reg S:
USU4377TAG59
$ 399,875,000
99.97%
5.000% Senior Notes due 2028
.............................................
144A: 435765AH5 /
Reg S: U4377TAF7
144A: US435765AH53 / Reg S:
USU4377TAF76
$ 498,879,000
99.78%
Total:............................................................................
$ 898,754,000
99.86%
For each $1,000 principal amount of HEP Notes validly tendered
and not validly withdrawn prior to the Expiration Date, Eligible
Holders (as defined below) of HEP Notes were eligible to receive
$1,000 principal amount of such series of New Notes, plus a payment
of $1.00 in cash.
As previously announced, as of 11:00 a.m., New York City time,
on November 10, 2023, HF Sinclair, on behalf of the HEP Issuers,
had received the requisite number of consents to adopt the Proposed
Amendments with respect to each outstanding series of HEP Notes,
and the HEP Issuers executed a supplemental indenture to each
corresponding HEP Indenture (each, an “HEP
Amending Supplemental Indenture”) 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”). Each HEP Amending Supplemental Indenture will
become operative only upon the Settlement Date (as defined
below).
The Exchange Offers and Consent Solicitations were made pursuant
to the terms and subject to the conditions set forth in the
confidential exchange offer memorandum and consent solicitation
statement, dated October 30, 2023, as amended by the press release
issued on November 13, 2023 (as amended, the “Exchange Offer Memorandum”), in a private offering
exempt from, or not subject to, registration under the Securities
Act of 1933, as amended (the “Securities
Act”). The settlement date of the Exchange Offers and
Consent Solicitations (the “Settlement
Date”) is expected to occur on or about December 4, 2023.
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, although HF Sinclair may generally
waive any such condition 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. Notwithstanding the foregoing, HF
Sinclair may not waive or modify the condition that the Proposed
Merger (as defined below) shall have been consummated. On November
28, 2023, HF Sinclair and HEP held the special meeting of
stockholders of HF Sinclair and unitholders of HEP, respectively,
to vote on matters related to the Proposed Merger, and all of the
proposals set forth at each respective special meeting were
approved by HF Sinclair’s stockholders and HEP’s unitholders, as
applicable, as described in the Current Report on Form 8-K filed by
each of HF Sinclair and HEP with the SEC on November 28, 2023. The
Proposed Merger is expected to close on December 1, 2023 (the
“Merger Closing Date”), subject to the
satisfaction or waiver of the remaining conditions to close, each
of which by their nature cannot be satisfied until the Merger
Closing Date.
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 and will
not be registered with the SEC under 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. Accordingly,
the New Notes were offered for exchange, and documents relating to
the Exchange Offers and Consent Solicitations were distributed,
only to persons who properly completed and returned an eligibility
certification (the “Eligibility
Letter”), which was available from the Information Agent (as
defined below), 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) (such persons, “Eligible
Holders”). HF Sinclair will also enter into a registration
rights agreement with the dealer managers, for the benefit of the
holders of the New Notes. The complete terms and conditions of the
Exchange Offers and Consent Solicitations are described in the
Exchange Offer Memorandum.
Questions concerning the terms of the Exchange Offers or the
Consent Solicitations should be directed to the lead 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 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.
D.F. King & Co., Inc. was the information and exchange agent
(the “Information Agent”) in
connection with the Exchange Offers and Consent Solicitations and
can be contacted 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.
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 for the proposed merger of a wholly owned subsidiary of HF
Sinclair with and into HEP, with HEP surviving as an indirect
wholly owned subsidiary of HF Sinclair (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 (as
defined herein) 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;
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231129018843/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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