Delek Logistics announces $200 million senior notes offering

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Written By Pinang Driod

BRENTWOOD, Tenn. – Delek Logistics Partners, LP (NYSE: NYSE:), alongside its subsidiary Delek Logistics Finance Corp., is set to offer an additional $200 million in 8.625% senior notes due 2029.

These notes, subject to market conditions, will be part of a private placement to qualified institutional buyers and non-U.S. persons outside the United States. This move follows the issuance of $650 million in senior notes under the same terms on March 13, 2024.

The company aims to direct the net proceeds from this offering towards reducing the balance of its revolving credit facility. The newly offered notes will be identical to the existing notes issued earlier and will be consolidated into the same series for trading purposes.

Delek Logistics, a master limited partnership with operations primarily in the Permian and Delaware Basins as well as the Gulf Coast region, specializes in providing midstream energy services. These include the gathering, transportation, and storage of , refined products, and , among other services.

The offering is designed to be exempt from registration under the Securities Act of 1933, leveraging Rule 144A for U.S. buyers and Regulation S for international investors. The notes, along with their guarantees, have not been registered under the Securities Act or state securities laws, and will not be available for sale in the U.S. without proper registration or an exemption.

Delek US Holdings, Inc. (NYSE: NYSE:), which holds the general partner interest and a majority of the limited partner interest in Delek Logistics, is also a significant customer of the partnership.

This news is based on a press release statement.

InvestingPro Insights

As Delek Logistics Partners, LP (NYSE: DKL) navigates through the complexities of capital restructuring, the company’s financial health and market performance remain pivotal. With a market capitalization of approximately $1.81 billion and a price-to-earnings (P/E) ratio of 13.1, based on the last twelve months as of Q4 2023, Delek Logistics presents itself as a company with a stable valuation in the energy sector. The firm’s dedication to shareholder returns is evident, with a robust dividend yield of 10.8% and a history of increasing its dividend for 12 consecutive years, showcasing a commitment to consistent shareholder value.

InvestingPro Tips highlight that Delek Logistics is currently trading near its 52-week low, which could signal a potential entry point for investors considering the stock’s historical volatility and the relative strength index (RSI) suggesting that it may be in oversold territory. Additionally, analysts forecast profitability for the company this year, bolstering confidence in its financial outlook.

For investors seeking a deeper dive into Delek Logistics’ performance metrics and future potential, InvestingPro offers additional tips and insights. Currently, there are 6 more InvestingPro Tips available for Delek Logistics, which can be accessed by visiting https://www.investing.com/pro/DKL. To enhance your investment research experience, use the coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription.

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