By Cristal Cody
Tupelo, Miss., Sept. 11 – Gray Oak Pipeline, LLC priced $1.4 billion of senior notes in three tranches (Baa3/BBB) in a Rule 144A and Regulation S offering on Friday, according to a market source.
A $400 million tranche of three-year notes priced at a spread of Treasuries plus 187.5 basis points.
Initial price talk was in the 250 bps spread area.
The company sold $600 million of 2.6% five-year notes at a 237.5 bps over Treasuries spread, tighter than talk at the 287.5 bps area.
In the final tranche, $400 million of 3.45% seven-year notes were priced with a 300 bps spread over Treasuries.
The notes were initially guided to price in the Treasuries plus 325 bps area.
BofA Securities Inc., Mizuho Securities USA LLC, MUFG, RBC Capital Markets LLC, Scotia Capital (USA) Inc. and TD Securities (USA) LLC were the bookrunners.
The company held fixed income investor calls for the offering on Tuesday and Wednesday.
Proceeds will be used to refinance an existing term loan due in 2022.
Gray Oak is an 850-mile pipeline across Texas jointly owned by Phillips 66 Partners LP, Marathon Petroleum Corp., Enbridge Inc. and Rattler Midstream LP.
| Issuer: | Gray Oak Pipeline, LLC
|
| Amount: | $1.4 billion
|
| Description: | Senior notes
|
| Bookrunners: | BofA Securities Inc., Mizuho Securities USA LLC, MUFG, RBC Capital Markets LLC, Scotia Capital (USA) Inc. and TD Securities (USA) LLC
|
| Spread: | Treasuries plus 140 bps
|
| Trade date: | Sept. 11
|
| Ratings: | Moody’s: Baa3
|
| S&P: BBB
|
| Distribution: | Rule 144A and Regulation S
|
| Marketing: | Fixed income investor calls
|
|
|
| Three-year notes
|
| Amount: | $400 million
|
| Maturity: | Sept. 15, 2023
|
| Coupon: | 2%
|
| Spread: | Treasuries plus 187.5 bps
|
| Price guidance: | Treasuries plus 250 bps area
|
|
|
| Five-year notes
|
| Amount: | $600 million
|
| Maturity: | Oct. 15, 2025
|
| Coupon: | 2.6%
|
| Spread: | Treasuries plus 237.5 bps
|
| Price guidance: | Treasuries plus 287.5 bps area
|
|
|
| Seven-year notes
|
| Amount: | $400 million
|
| Maturity: | Oct. 15, 2027
|
| Coupon: | 3.45%
|
| Spread: | Treasuries plus 300 bps
|
| Price guidance: | Treasuries plus 325 bps area
|
|
|
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