Marathon Petroleum discloses pricing on $700 million term loan

By Marisa Wong

Madison, Wis., Aug. 29 – Marathon Petroleum Corp. entered into a $700 million five-year senior unsecured term loan agreement on Aug. 26, according to an 8-K filing with the Securities and Exchange Commission.

Borrowings will bear interest at Libor plus a margin ranging between 87.5 basis points to 175 bps, depending on the company’s credit ratings.

Among other things, the term loan agreement requires Marathon to maintain, as of the last day of each fiscal quarter, a ratio of consolidated net debt to total capitalization of no greater than 0.65 to 1.00.

Royal Bank of Scotland plc is the administrative agent under the loan agreement; RBS Securities Inc., Bank of Tokyo-Mitsubishi UFJ, Ltd., Barclays Bank plc, Citigroup Global Markets Inc. and Morgan Stanley Senior Funding, Inc. are the joint lead arrangers and joint bookrunners; Bank of Tokyo-Mitsubishi UFJ, Ltd. is syndication agent; and Barclays Bank plc, Citigroup Global Markets Inc. and Morgan Stanley Senior Funding, Inc. are documentation agents.

As previously announced, loan proceeds will be used to help fund Marathon’s acquisition of Hess Retail Holdings LLC through wholly owned subsidiary Speedway LLC. The transaction is expected to close later this year.

The company said in a prior press release that the term loan was “substantially” oversubscribed from a group of the lenders who are also participants in its primary revolving credit facility.

Marathon Petroleum is a crude oil refiner based in Findlay, Ohio. Speedway owns and operates a chain of convenience stores.

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