UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 1.01 | Entry into a Material Definitive Agreement |
On September 20, 2023, Sunoco LP (NYSE: SUN) (the “Partnership”) and Sunoco Finance Corp. (“Finance Corp.” and, together with the Partnership, the “Issuers”) completed a private offering to eligible purchasers (the “Notes Offering”) of $500,000,000 aggregate principal amount of 7.000% senior notes due 2028 (the “Notes”), along with the related guarantees of the Notes. The Issuers received net proceeds of approximately $494 million from the Notes Offering, after deducting the initial purchasers’ discount and commissions and estimated offering expenses payable by the Partnership, and the Partnership used such net proceeds to repay a portion of the outstanding borrowings under the Partnership’s revolving credit facility (the “Revolving Credit Facility”). The Notes were issued in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), and were resold by the initial purchasers in reliance on Rule 144A and Regulation S under the Securities Act.
Indenture and Senior Notes
The Notes were issued under and are governed by an indenture dated September 20, 2023 (the “Indenture”), among the Issuers, certain subsidiary guarantors of the Partnership (the “Guarantors”) and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The Notes will mature on September 15, 2028, and interest on the Notes is payable semi-annually in cash in arrears on March 15 and September 15 of each year, commencing on March 15, 2024.
The Notes are senior unsecured obligations of the Issuers and are guaranteed on a senior unsecured basis by all of the Partnership’s current subsidiaries (other than Finance Corp.) that guarantee its obligations under the Revolving Credit Facility, as well as by certain of its future subsidiaries. The Notes and related guarantees are unsecured and rank equally with all of the Issuers’ and each Guarantor’s existing and future senior obligations. The Notes and related guarantees are senior in right of payment to all of the Issuers’ and each Guarantor’s future indebtedness and other obligations that are, by their terms, expressly subordinated in right of payment to the Notes and guarantees. The Notes and related guarantees are effectively subordinated to the Issuers’ and each Guarantor’s existing and future secured indebtedness, including obligations under the Revolving Credit Facility, to the extent of the value of the assets securing such indebtedness, and structurally subordinated to all obligations, including trade payables, of the Issuers’ subsidiaries that do not guarantee the Notes.
The Issuers may, at their option, redeem some or all of the Notes at any time on or after September 15, 2025, at the redemption prices specified in the Indenture. Prior to such time, the Issuers may redeem some or all of the Notes at a redemption price equal to 100% of the aggregate principal amount of the Notes redeemed, plus a customary “make-whole premium” and accrued and unpaid interest, if any, to, but not including, the redemption date. In addition, before September 15, 2025, the Issuers may redeem up to 35% of the aggregate principal amount of the Notes with an amount of cash not greater than the net cash proceeds from certain equity offerings at the redemption prices specified in the Indenture.
Upon the occurrence of a Change of Control (as defined in the Indenture), which occurrence (other than one involving the adoption of a plan relating to liquidation or dissolution) is followed by a ratings decline within 90 days after the consummation of the transaction, each holder of the Notes may require the Issuers to repurchase all or a portion of the holder’s Notes at a purchase price equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to, but not including, the date of settlement. Additionally, if the Partnership sells certain assets and does not apply the proceeds from the sale in a certain manner, the Issuers must use certain excess proceeds to offer to repurchase the Notes at 100% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to, but not including, the repurchase date.
The Indenture contains customary events of default (each an “Event of Default”), including the following:
(1) default for 30 days in the payment when due of interest on the Notes;
(2) default in the payment when due (at stated maturity, upon optional or mandatory redemption or otherwise) of the principal of, or premium, if any, on the Notes;
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(3) failure by the Partnership or any Guarantor to comply with their obligations to make or consummate a Change of Control offer or asset sale offer or to comply with any of their agreements or covenants relating to merger, consolidation or sale of assets; provided that such failure (other than one involving failure to make or consummate a Change of Control offer) will not constitute an Event of Default for 30 days if such failure is capable of cure;
(4) failure by the Partnership for 180 days after notice by the Trustee or holders of 25% in aggregate principal amount of the Notes then outstanding to comply with its obligations to furnish the holders of the Notes and the Trustee certain reports;
(5) failure by the Partnership or any Guarantor for 60 days after written notice by the Trustee or holders of 25% in aggregate principal amount of the Notes then outstanding to comply with any of its other agreements in the Indenture;
(6) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by the Partnership or any of its restricted subsidiaries (or the payment of which is guaranteed by the Partnership or any of its restricted subsidiaries) whether the indebtedness or guarantee now exists, or is created after the date of the Indenture, if that default (a) is caused by a failure to pay principal of, or interest or premium, if any, on the indebtedness prior to the expiration of the grace period provided in such indebtedness on the date of the default (a “Payment Default”) or (b) results in the acceleration of such indebtedness prior to its express maturity, and, in each case, the principal amount of any of the indebtedness, together with the principal amount of any other indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $50.0 million or more; provided, however, that if, prior to any acceleration of the Notes, (i) any such Payment Default is cured or waived, (ii) any such acceleration is rescinded or (iii) such indebtedness is repaid during the ten business day period commencing upon the end of any applicable grace period for such Payment Default or the occurrence of such acceleration, as applicable, any default or Event of Default (but not any acceleration of the Notes) caused by such Payment Default or acceleration shall automatically be rescinded, so long as such rescission does not conflict with any judgment, decree or applicable law;
(7) failure by the Issuers or any of the Partnership’s restricted subsidiaries to pay final judgments entered by a court or courts of competent jurisdiction aggregating in excess of $50.0 million, which judgments are not paid, discharged or stayed for a period of 60 days;
(8) except as permitted under the Indenture, any guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any Guarantor, or any person acting on behalf of any Guarantor, denies or disaffirms its obligations under its guarantee; and
(9) certain events of bankruptcy or insolvency described in the Indenture with respect to the Issuers or any of the Partnership’s restricted subsidiaries that is a significant subsidiary or any group of the Partnership’s restricted subsidiaries that, taken together, would constitute a significant subsidiary.
If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare the principal and accrued and unpaid interest on the Notes to be due and payable immediately. If an Event of Default relating to certain events of bankruptcy or insolvency with respect to the Issuers or any of the Partnership’s restricted subsidiaries that is a significant subsidiaries or any group of the Partnership’s restricted subsidiaries that, taken together, would constitute a significant subsidiary, occurs and is continuing, all outstanding Notes will become due and payable immediately without further action or notice on the part of the Trustee or any holders of the Notes. Under certain circumstances, the holders of a majority in principal amount of the outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences.
The above description of the Indenture, the Notes and the guarantees is not complete and is qualified in its entirety by reference to the full text of the Indenture, which is attached hereto as Exhibit 4.1 and is incorporated into this Item 1.01 by reference.
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| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
The information set forth in Item 1.01 relating to the Indenture under the heading “Indenture and Senior Notes” is hereby incorporated into this Item 2.03 by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit Number |
Description | |
| 4.1 | Indenture, dated as of September 20, 2023, by and among Sunoco LP, Sunoco Finance Corp., the Guarantors party thereto and U.S. Bank Trust Company, National Association, as Trustee. | |
| 104 | Cover Page Interactive File (the cover page tags are embedded within the Inline XBRL document). | |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SUNOCO LP | ||||||
| By: | SUNOCO GP LLC, | |||||
| its General Partner | ||||||
| Date: September 20, 2023 | By: | /s/ Rick Raymer | ||||
| Name: | Rick Raymer | |||||
| Title: | Vice President, Controller and Principal Accounting Officer | |||||
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