Item 1.01.
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Entry into a Material Definitive Agreement.
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Purchase Agreement
On
March 11, 2019, Sunoco GP LLC (the General Partner), Sunoco LP (the Partnership), Sunoco Finance Corp. (SUN Finance and, together with the Partnership, the Issuers) and certain subsidiary
guarantors of the Partnership (the Guarantors) entered into a purchase agreement (the Purchase Agreement) with Goldman Sachs & Co. LLC and Mizuho Securities USA LLC, as representatives of the several initial
purchasers named therein (the Initial Purchasers), with respect to a private offering to eligible purchasers (the Notes Offering) by the Issuers of $600,000,000 aggregate principal amount of new 6.000% senior notes due 2027
(the Notes), along with the related guarantees of the Notes.
The Notes Offering closed on March 14, 2019, in accordance
with the terms of the Purchase Agreement. The Issuers received net proceeds of approximately $593 million from the Notes Offering, after deducting the Initial Purchasers discount and commissions and estimated offering expenses payable by
the Partnership, and the Partnership used such net proceeds to repay a portion of the outstanding borrowings under its existing $1.5 billion revolving credit facility (the Revolving Credit Facility). The Notes were issued in a
transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the Securities Act), and were resold by the Initial Purchasers in reliance on Rule 144A and Regulation S of the Securities Act.
The Purchase Agreement contains customary representations, warranties and agreements by the General Partner, the Issuers and the Guarantors
and customary conditions to closing, obligations of the parties and termination provisions. The Issuers and the Guarantors have agreed to indemnify the Initial Purchasers against certain liabilities, including liabilities under the Securities Act,
or to contribute to payments the Initial Purchasers may be required to make because of any of those liabilities.
The Initial Purchasers
and their respective affiliates have provided, and may in the future provide, various financial advisory, sales and trading, commercial and investment banking and other financial and
non-financial
activities
and services to the Partnership and its affiliates, for which they received or will receive customary fees and expenses. Certain affiliates of each of the Initial Purchasers are lenders under the Revolving Credit Facility and, accordingly, will
receive their pro rata share of the amounts used from the net proceeds of the Notes Offering to repay indebtedness under the Revolving Credit Facility.
The foregoing description is qualified in its entirety by reference to the full text of the Purchase Agreement, which is filed as Exhibit 1.1
to this Current Report on Form
8-K
and which is incorporated in this Item 1.01 by reference.
Indenture and
Senior Notes
The Notes were issued under and are governed by an indenture dated March 14, 2019 (the Indenture),
among the Issuers, the Guarantors and U.S. Bank National Association, as trustee (the Trustee). The Notes will mature on April 15, 2027 and interest on the Notes is payable semi-annually on April 15 and October 15 of each
year, commencing October 15, 2019.
The Notes are senior obligations of the Issuers and are guaranteed on a senior basis by all of
the Partnerships current subsidiaries (other than SUN Finance) that guarantee its obligations under the Revolving Credit Facility and certain of its future subsidiaries. The Notes and guarantees are unsecured and rank equally with all of the
Issuers and each Guarantors existing and future senior obligations. The Notes are senior in right of payment to any of the Issuers and each Guarantors future obligations that are, by their terms, expressly subordinated in
right of payment to the Notes and guarantees. The Notes and guarantees are effectively subordinated to the Issuers and each Guarantors secured obligations, including obligations under the Revolving Credit Facility, to the extent of the
value of the collateral securing such obligations, and structurally subordinated to all indebtedness and obligations, including trade payables, of the Partnerships subsidiaries that do not guarantee the Notes.
The Issuers may, at their option, redeem some or all of the Notes at any time on or after April 15, 2022, at the redemption prices
specified in the Indenture. Prior to such time, the Issuers may redeem some or all of the Notes at a redemption price equal to 100% of the aggregate principal amount of the Notes redeemed, plus the applicable premium and accrued and
unpaid interest, if any, to, but not including, the applicable redemption date. In addition, before April 15, 2022, the Issuers may redeem up to 35% of the aggregate principal amount of the Notes with an amount of cash not greater than the net
cash proceeds from certain equity offerings at the redemption price specified in the Indenture.