Sunoco LP (ticker: SUN) and Energy Transfer Equity, L.P. (ticker: ETE) announced the completion of a private placement of $300 million in SUN preferred equity to ETE.
Distributions on the new SUN Series A Perpetual preferred units issued to ETE are cumulative and will be payable quarterly from and including the date of original issue. The initial distribution rate of 10.00% per annum of the stated liquidation preference of $25.00 will change to an annual floating rate equal to three-month LIBOR plus a spread of 8.0% on and after the five-year anniversary of the issuance of the preferred units. The preferred units are redeemable at SUN’s option for five years after the issue date at 101% of the liquidation preference plus any accrued quarterly distributions. Starting five years following the issue date, the preferred units are redeemable at SUN’s option at the liquidation preference plus any accrued quarterly distributions. The preferred units represent a perpetual equity interest in SUN and rank junior to all of SUN’s existing and future indebtedness, including SUN’s revolving credit facility and term loan.
The purchase of SUN preferred units by ETE has been approved by the board of directors of both Partnerships and their respective conflicts or special committees.
Proceeds from the preferred unit issuance will be used by SUN to repay borrowings under its revolving credit facility.
About Sunoco LP
Sunoco LP (ticker: SUN) is a master limited partnership that operates 1,345 convenience stores and retail fuel sites and distributes motor fuel to 7,845 convenience stores, independent dealers, commercial customers and distributors located in 30 states. Our parent-Energy Transfer Equity, L.P. (ticker: ETE)-owns SUN’s general partner and incentive distribution rights.
