DALLAS --Sunoco LP continues to anticipate a fourth-quarter 2017 closing of the $3.3 billion deal for 7-Eleven Inc. to acquire more than 1,100 of its convenience stores, subject to regulatory clearances and despite hitting a road bump related to its bonds.
On Oct. 10, Sunoco started the consent-solicitation process for $800 million of its 6.25% bonds maturing in 2021 and $800 million of its 6.375% bonds due in 2023.
The transaction reportedly hit a snag when a group of bondholders told Sunoco it intends to oppose the company’s attempt to change the terms of the credit pact governing about $1.6 billion of bonds—a step Sunoco has said is needed in order to complete the sale. The debtholders are demanding more money and better protections to agree to the changes in the bond indentures, a person familiar with the matter told Bloomberg.
On Oct. 18, Sunoco and Sunoco Finance Corp. terminated the consent solicitations to amend the indentures governing bonds. No consent fees will be paid or become payable to holders of the bonds who have delivered consents.
The termination of the consent solicitations does not affect the redemption of the $600 million outstanding principal amount of the 5.500% bonds due 2020, subject to the closing of the 7-Eleven transaction, the company said. Sunoco will redeem the 2020 bonds at a price of 102.750% of the principal amount, plus accrued and unpaid interest to the redemption date.
Sunoco intends to redeem the 2021 and 2023 bonds at a make-whole price before the closing of the 7-Eleven transaction to satisfy one of the closing conditions under the 7-Eleven purchase agreement. Sunoco believes this will have no effect on the timing of the transaction and no meaningful effect on the expected net proceeds, and that it has access to near-term financing options in the current market.
Dallas-based Sunoco LP is a master limited partnership that operates 1,353 convenience stores and retail fuel sites and distributes motor fuel to 7,937 convenience stores, independent dealers, commercial customers and distributors in 30 states.
7-Eleven Inc., Irving, Texas, operates, franchises or licenses 10,900 c-stores in North America, including nearly 9,000 in the United States.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.