Energy pipelines and terminals operator
Sunoco Logistics Partners L.P.
) recently announced that it will offer $700 million of senior
notes through its fully owned subsidiary Sunoco Logistics
Partners Operations L.P. The offering will be made in two parts
-- $350 million 3.45% senior notes due 2023 and $350 million
4.95% senior notes due 2043.
MARKWEST EGY PT (MWE): Free Stock Analysis
SUNOCO LOGISTIC (SXL): Free Stock Analysis
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Net returns from the issue are estimated at approximately $692
million. The operating partnership will be using the proceeds to
repay its outstanding balance of $350 million and $200 million
under revolving credit facility. The remaining proceeds will be
used for general partnership purposes and capital investments.
Sunoco expects the proceedings to be over on January 10, 2013,
subject to customary closing conditions.
Sunoco ended the third quarter of 2012 with $1,627.0 million in
total debt (consisting of $179.0 million of borrowing under the
partnership's credit facility), representing a
debt-to-capitalization ratio of approximately 54.1%. We also
expect interest expenses to increase with the sale of the new
Sunoco Logistics Partners currently retains a Zacks #1 Rank
(short-term Buy rating). We are also maintaining our long-term
Outperform recommendation on the partnership.
Philadelphia-based Sunoco Logistics Partners L.P., a master
limited partnership (MLP), acquires, owns, and operates a
geographically diverse portfolio of refined product and crude oil
pipelines and terminal facilities. Sunoco Logistics is organized
into four segments -- Refined Products Pipeline System, Terminal
Facilities, Crude Oil Pipeline System and Crude Oil Acquisition
With its low-risk and stable cash flow-generating energy
infrastructure assets, Sunoco Logistics offers investors an
opportunity to capture income growth through steadily rising cash
distributions and capital appreciation.
However, among Sunoco's peers,
MarkWest Energy Partners L.P.
) holds a Zacks #3 Rank, which translates into a short-term Hold