Valero Energy Announces the Pricing Terms of its Pending Cash Tender Offers

Source: www.gulfoilandgas.com 2/16/2022, Location: North America

Valero Energy Corporation announced the pricing terms of its previously announced cash tender offers (the “Tender Offers”) to purchase its outstanding 3.650% Senior Notes due 2025 (the “3.650% 2025 Notes”), its outstanding 2.850% Senior Notes due 2025 (the “2.850% 2025 Notes”), the outstanding 4.375% Senior Notes due 2026 issued by Valero Energy Partners LP and guaranteed by Valero (the “4.375% 2026 Notes”), its outstanding 3.400% Senior Notes due 2026 (the “3.400% 2026 Notes”), its outstanding 2.150% Senior Notes due 2027 (the “2027 Notes”), its outstanding 4.350% Senior Notes due 2028 (the “4.350% 2028 Notes”) and the outstanding 4.500% Senior Notes due 2028 issued by Valero Energy Partners LP and guaranteed by Valero (the “4.500% 2028 Notes” and, collectively with the 3.650% 2025 Notes, the 2.850% 2025 Notes, the 4.375% 2026 Notes, the 3.400% 2026 Notes, the 2027 Notes and the 4.350% 2028 Notes, the “Notes”), for up to an increased maximum aggregate purchase price which, after giving effect to the increase of the Series Tender Cap (as defined in the Offer to Purchase dated February 2, 2022 (the “Offer to Purchase”)) for the 3.650% 2025 Notes and 2.850% 2025 Notes to a maximum aggregate principal amount of $579,319,000, is sufficient to purchase all of the 3.400% 2026 Notes validly tendered and not validly withdrawn at or prior to the Early Tender Date (as defined below) (such increased maximum aggregate purchase price, the “Maximum Aggregate Purchase Price”). The terms and conditions of the Tender Offers are described in the Offer to Purchase.

The following table lists the Tender Offers that had been validly tendered and not validly withdrawn at or prior to 5:00 p.m., New York City time, on February 15, 2022 (the “Early Tender Date”), as reported by D.F. King & Co., Inc., the tender and information agent. The applicable Reference Yield, Repurchase Yield, Early Tender Payment and Total Consideration (each as defined more fully in the Offer to Purchase) with respect to the Notes accepted for purchase are detailed in the table below.

Because the aggregate principal amount of Notes validly tendered and not validly withdrawn at or prior to the Early Tender Date has an aggregate purchase price that exceeds the Maximum Aggregate Purchase Price, Valero does not expect to accept for purchase all Notes that have been validly tendered and not validly withdrawn at or prior to the Early Tender Date. Rather, subject to the Maximum Aggregate Purchase Price, the Series Tender Cap (as defined in the Offer to Purchase) applicable to the 3.650% 2025 Notes and 2.850% 2025 Notes and the acceptance priority levels set forth in the table above, in each case as further described in the Offer to Purchase, Valero will accept for purchase 3.650% 2025 Notes, 2.850% 2025 Notes, 4.375% 2026 Notes and 3.400% 2026 Notes validly tendered and not validly withdrawn at or prior to the Early Tender Date and does not expect to accept for purchase any 2027 Notes, 4.350% 2028 Notes or 4.500% 2028 Notes. Valero expects to accept for purchase 2.85% 2025 Notes validly tendered and not validly withdrawn at or prior to the Early Tender Date on a prorated basis. As a result, a holder who validly tenders and does not validly withdraw Notes pursuant to the Tender Offers may have all or a portion of its Notes returned to it.

On the Early Settlement Date (as defined below), Valero will pay the Total Consideration (as shown in the table above) for each $1,000 principal amount of each of the 3.650% 2025 Notes, 2.850% 2025 Notes, 4.375% 2026 Notes and 3.400% 2026 Notes validly tendered and not validly withdrawn at or prior to the Early Tender Date and accepted for purchase. The Total Consideration was calculated in the manner described in the Offer to Purchase by reference to the applicable fixed spread specified in the table above plus the applicable yield to maturity based on the bid-side price of the applicable U.S. Treasury Reference Security specified in the table above at 10:00 a.m., New York City time, on February 16, 2022. The Total Consideration also includes the Early Tender Payment (as shown in the table above) for each $1,000 principal amount of each of the 3.650% 2025 Notes, 2.850% 2025 Notes, 4.375% 2026 Notes and 3.400% 2026 Notes validly tendered and not validly withdrawn at or prior to the Early Tender Date and accepted for purchase. Payments for the 3.650% 2025 Notes, 2.850% 2025 Notes, 4.375% 2026 Notes and 3.400% 2026 Notes accepted for purchase will include accrued and unpaid interest from the last interest payment date applicable to the relevant series of Notes up to, but excluding, the settlement date for Notes that are validly tendered and not validly withdrawn at or prior to or at the Early Tender Date and accepted for purchase (the “Early Settlement Date”). It is anticipated that the Early Settlement Date will be February 17, 2022, the second business day after the Early Tender Date.

The Tender Offers will expire at midnight, New York City time, at the end of March 2, 2022, unless extended or earlier terminated. Because the Tender Offers have been fully subscribed as of the Early Tender Date, holders who tender Notes after the Early Tender Date will not have any of their Notes accepted for purchase, unless Valero elects to increase or eliminate the Maximum Aggregate Purchase Price. Any Notes tendered after the Early Tender Date, together with any Notes tendered at or prior to the Early Tender Date but not accepted for purchase by Valero, will be returned to the holders thereof as described in the Offer to Purchase, unless Valero elects to increase or eliminate the Maximum Aggregate Purchase Price.

The withdrawal deadline for the Tender Offers was 5:00 p.m., New York City time, on February 15, 2022 and has not been extended. Accordingly, previously tendered Notes and Notes tendered after such withdrawal deadline may not be withdrawn, subject to applicable law.

Valero’s obligation to accept for payment and to pay for the Notes validly tendered and not validly withdrawn in the Tender Offers is subject to the satisfaction or waiver of a number of conditions described in the Offer to Purchase. The Tender Offers may be terminated or withdrawn in whole or terminated or withdrawn with respect to any series of the Notes, subject to applicable law. Valero reserves the right, subject to applicable law, to (1) waive any and all conditions to any of the Tender Offers, (2) extend or terminate any of the Tender Offers, (3) increase, decrease or eliminate the Maximum Aggregate Purchase Price with respect to a particular series and/or the Series Tender Cap or (4) otherwise amend any of the Tender Offers in any respect.

Valero has retained SMBC Nikko Securities America, Inc., J.P. Morgan Securities LLC and Mizuho Securities USA LLC as lead dealer managers, and Citigroup Global Markets Inc. and MUFG Securities Americas Inc. as co-dealer managers (together with the lead dealer managers, the “Dealer Managers”) for the Tender Offers. Valero has retained D.F. King & Co., Inc. as the tender and information agent for the Tender Offers. For additional information regarding the terms of the Tender Offers, please contact: SMBC Nikko Securities America, Inc. at (888) 284-9760 (toll free) or (212) 224-5328 (collect); J.P. Morgan Securities LLC at (866) 834-4666 (toll free) or (212) 834-3424 (collect); or Mizuho Securities USA LLC at (866) 271-7403 (toll free) or (212) 205-7736 (collect). Requests for documents and questions regarding the tendering of securities may be directed to D.F. King & Co., Inc. by telephone at (212) 269-5550 (for banks and brokers only) or (800) 334-0384 (for all others, toll-free), by email at vlo@dfking.com or to the Dealer Managers at their respective telephone numbers.


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