Alon spikes notes offering, Krotz Springs buy due to market conditions

By Paul A. Harris and Toni Weeks

Portland, Ore., Nov. 19 – Alon Partners, LP announced late on Wednesday that it will not proceed with its senior notes offering due to market conditions.

According to a press release, Alon USA Partners, LP and wholly owned subsidiary Alon USA Partners Finance Co. also have opted not to move forward with the acquisition of the Krotz Springs Refinery from Alon USA Energy, Inc.

The company had been planning to price on Wednesday afternoon a downsized and restructured $400 million offering of six-year senior notes to yield 7¾%, according to a market source.

The offer was reduced from $450 million, with the maturity cut to six years from eight years. Call protection would have been increased to four years from three years.

Goldman Sachs & Co. and Deutsche Bank Securities Inc. were to serve as joint bookrunners for the Rule 144A and Regulation S with registration rights deal. Fifth Third Bank and SunTrust Robinson Humphrey Inc. were to be the co-managers.

Proceeds, together with the issuance of common units representing limited partner interests in Alon Partners to a subsidiary of Alon USA Energy, had been slated for the cash portion of the pending acquisition of the refinery and to repay bank debt.

The prospective issuer, a Delaware limited partnership formed by Alon Energy, owns and operates a crude oil refinery in Big Spring, Texas.

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