Marathon Petroleum Corp.
), the Ohio-based independent oil refiner and marketer, announced
and priced a three-part senior note offering totaling $1.95
billion. The offering is expected to close on Sep 5.
The $750 million senior note offering, due 2024, carried an
interest rate of 3.625% and was priced at 99.641% of par. The $800
million offering, due 2044, carried an interest of 4.75% and was
priced at 98.862% of par. The third offering of $400 million, due
2054, carried an interest of 5% and was priced at 98.77% of par.
Marathon Petroleum announced that the net proceeds from these
offerings would be used to fund its affiliate, Speedway LLC's
purchase of retail and transport operations of integrated energy
firm Hess Corporation (
Marathon Petroleum to Boost Retail with Hess
On Aug 26, the company had announced a $700 million senior
unsecured term loan with the same purpose. The loan was for a
Marathon Petroleum is the fourth largest domestic refiner,
transporter and marketer of petroleum products. The company, in its
current form, came into existence following the 2011 spin-off of
Houston, TX-based Marathon Oil Corp's (
) refining/sales business into a separate, independent and publicly
A major advantage for the company is its proprietary access to
pipelines, which inhibits lower-cost competitors from supplying to
Marathon Petroleum's key markets. However, Marathon's core business
- refining - is faced with a high degree of volatility, while being
capital intensive. This is expected to limit its ability to deliver
positive earnings surprises.
Marathon Petroleum currently has a Zacks Rank #3 (Hold),
implying that it is expected to perform in line with the broader
U.S. equity market over the next one to three months.
Meanwhile, one can consider a better-ranked player from the oil
refining and marketing industry like EnLink Midstream, LLC (
), sporting a Zacks Rank #1 (Strong Buy).
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HESS CORP (HES): Free Stock Analysis Report
MARATHON PETROL (MPC): Free Stock Analysis
ENLINK MIDS LLC (ENLC): Free Stock Analysis
MARATHON OIL CP (MRO): Free Stock Analysis
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