By Andrea Heisinger
New York, Jan. 27 - Marathon Petroleum Corp. sold $3 billion of senior notes (Baa1/BBB/) in three parts late on Thursday, a market source away from the deal said.
The size was increased from an initial $2.5 billion, another source said.
A $750 million tranche of 3.5% five-year notes sold at 99.992 to yield 3.501% with a spread of Treasuries plus 155 basis points. This was at the tight end of guidance in the 160 bps area.
The tranche has a make-whole call at 25 bps over Treasuries.
A $1 billion tranche of 5.125% 10-year notes priced at 99.947 to yield 5.131% with a spread of Treasuries plus 175 bps. The notes also sold in line with talk in the 180 bps area.
The notes have a make-whole call at 30 bps over Treasuries.
The final part was $1.25 billion of 6.5% 30-year bonds priced at 99.155 to yield 6.564% with a spread of 200 bps over Treasuries. Guidance was in the 205 bps area, with the notes coming in at the tight end of talk.
The bonds are callable at a make-whole of 35 bps over Treasuries.
Bookrunners were J.P. Morgan Securities LLC and Morgan Stanley & Co. Inc.
The notes were sold under Rule 144A and Regulation S.
Proceeds are going to repay intercompany debt to parent Marathon Oil Corp. and other subsidiaries, to pay a special distribution to Marathon and for working capital and other general corporate purposes.
The oil company is based in Houston.
| Issuer: | Marathon Petroleum Corp.
|
| Issue: | Senior notes
|
| Amount: | $3 billion, increased from $2.5 billion
|
| Bookrunners: | J.P. Morgan Securities LLC, Morgan Stanley & Co. Inc.
|
| Distribution: | Rule 144A and Regulation S
|
| Trade date: | Jan. 27
|
| Settlement date: | Feb. 1
|
| Ratings: | Moody's: Baa1
|
| Standard & Poor's: BBB
|
|
|
| Five-year notes
|
| Amount: | $750 million
|
| Maturity: | March 1, 2016
|
| Coupon: | 3.5%
|
| Price: | 99.992
|
| Yield: | 3.501%
|
| Spread: | Treasuries plus 155 bps
|
| Call: | Make-whole at Treasuries plus 25 bps
|
| Price talk: | 160 bps area
|
|
|
| 10-year notes
|
| Amount: | $1 billion
|
| Maturity: | March 1, 2021
|
| Coupon: | 5.125%
|
| Price: | 99.947
|
| Yield: | 5.131%
|
| Spread: | Treasuries plus 175 bps
|
| Call: | Make-whole at 30 bps over Treasuries
|
| Price talk: | 180 bps area
|
|
|
| 30-year bonds
|
| Amount: | $1.25 billion
|
| Maturity: | March 1, 2041
|
| Coupon: | 6.5%
|
| Price: | 99.155
|
| Yield: | 6.564%
|
| Spread: | Treasuries plus 200 bps
|
| Call: | Make-whole at Treasuries plus 35 bps
|
| Price talk: | 205 bps area
|
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