Valero accepts tenders from four of eight series in capped offer

Chicago, Dec 3 – Valero Energy Corp. announced the early results for its tender offer and modified the maximum acceptance amount and one series subcap to accept tendered notes from four of the included eight series, according to a press release.

The offer was initially announced at $1 billion of notes from eight series. However, Valero has decided to accept more notes so that all of the notes from the fifth series can be accepted for purchase.

Additionally, for the first series Valero had said it would only buy up to $400 million of the notes, but it now says it will accept all of them.

There was a $400 million aggregate subcap for the second, third and four series together which did not change.

The tendered amounts and the accepted amounts for the first five of the eight series are the following:

• All $755,876,000 tendered of the $925 million outstanding (with the $400 million subcap eliminated) of the 1.2% senior notes due 2024 (Cusip: 91913YBA7) with pricing based on the 0.75% U.S. Treasury due Nov. 15, 2024 plus a 20 basis points spread;

• All $275,741,000 tendered of the $600 million outstanding 3.65% senior notes due 2025 (Cusip: 91913YAS9) with pricing based on the 1.125% U.S. Treasury due Oct. 31, 2026 plus 10 bps;

• $124,259,000 accepted of the $256.27 million tendered of the $500 million outstanding 4.375% senior notes due 2026 issued by Valero Energy Partners LP (Cusip: 91914JAA0) to be priced using the 1.125% U.S. Treasury due Oct. 31, 2026 plus 55 bps;

• None of the $722,105,000 tendered of the $1.05 billion outstanding 2.85% senior notes due 2025 (Cusip: 91913YAY6) to be priced using the 1.125% U.S. Treasury due Oct. 31, 2026 plus 25 bps; and

• All of the $137,013,000 tendered of the $250 million outstanding 10.5% senior notes due 2039 (Cusip: 91913YAP5) with pricing to be based on the 2% U.S. Treasury due Nov. 15, 2041 plus 175 bps.

For the next three series, Valero will not accept any of the notes, and the company did not provide the tender results, but they were initially part of the offer:

• $200 million outstanding 8.75% senior notes due 2030 (Cusip: 91913YAB6) with pricing to be based on the 1.375% U.S. Treasury due 125 bps;

• $750 million outstanding 7.5% senior notes due 2032 (Cusip: 91913YAE0) with pricing to be based on the 1.375% U.S. Treasury due Nov. 15, 2031 plus 135 bps; and

• $1.5 billion outstanding 6.625% senior notes due 2037 (Cusip: 91913YAL4) with pricing to be based on the 2% U.S. Treasury due Nov. 15, 2041 plus 140 bps.

In the capped tender offer, the considerations will be based on $1,000 per note and will include a $30 early participation fee for noteholders who tendered their notes by the early deadline.

The maximum tender offer had an early participation deadline at 5 p.m. ET on Dec. 2, also the withdrawal deadline.

Pricing for the capped offer will take place at 10 a.m. ET on Dec. 3.

Early settlement for this offer is scheduled for Dec. 6.

The maximum offer expires at midnight ET on Dec. 16. However, as it has been oversubscribed Valero does not expect to accept any more tendered notes for purchase.

The offers were subject to a financing condition.

Notes may be tendered via guaranteed delivery procedures.

J.P. Morgan Securities LLC (866 834-4666, 212 834-3424), Citigroup Global Markets Inc. (800 831-9146), BofA Securities, Inc., Mizuho Securities USA LLC and MUFG Securities Americas Inc. are the dealer managers for the offer.

D.F. King & Co., Inc. (888 334 0384, 212 269-5550, vlo@dfking.com, www.dfking.com/vlo) is the information and tender agent for the offer.

San Antonio-based Valero is an oil refinery owner and operator.

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