Delek US plans $400M convertible notes offering due 2031

Delek US Holdings, Inc. (NYSE: DK) announced a proposed private offering of $400.0 million in aggregate principal amount of convertible senior notes due 2031, according to a company statement.

The notes will mature on November 1, 2031, and will be senior unsecured obligations of the company, fully and unconditionally guaranteed by each subsidiary that guarantees its existing term loan and asset-based revolving credit facilities. Delek US also intends to grant initial purchasers an option to buy up to an additional $60.0 million in aggregate principal amount within a 13-day period following the initial closing date.

The company plans to use a portion of the net proceeds to fund capped call transactions intended to reduce potential dilution to its common stock upon conversion of the notes. The remainder will be applied to general corporate purposes, including partial repayment of amounts outstanding under its term loan credit facility, along with accrued interest and related fees.

The notes will not be redeemable before November 6, 2029, except in the case of a cleanup redemption, which applies when less than 10% of the originally issued principal amount remains outstanding. Prior to August 1, 2031, conversion will be permitted only under certain conditions and during specified periods.

The interest rate, initial conversion rate, and other terms will be set at the time of pricing. The notes are being offered exclusively to qualified institutional buyers under Rule 144A of the Securities Act of 1933 and have not been registered under that act.

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