Summary
Phillips 66 (PSX) filed an 8-K on March 28, 2023, detailing two significant financing events that occurred on March 27, 2023. First, the company entered into a $1.5 billion delayed draw term loan agreement, guaranteed by Phillips 66. This facility allows for a single borrowing within a 90-day window, maturing three years after funding, and includes customary covenants such as a maximum consolidated net debt-to-capitalization ratio of 65%. The terms indicate flexibility for prepayment without penalty, and interest rates are tied to SOFR or a reference rate plus applicable margins that adjust based on the company's debt ratings. Second, Phillips 66 Company, with a guarantee from Phillips 66, completed a public offering of $1.25 billion in senior notes. This offering comprised $750 million of 4.950% Senior Notes due 2027 and $500 million of 5.300% Senior Notes due 2033. These issuances are governed by an existing Indenture and were made under a Terms Agreement with various underwriters. These actions demonstrate Phillips 66's proactive approach to managing its capital structure and securing funding.
Key Highlights
- 1Phillips 66 secured a new $1.5 billion delayed draw term loan facility to provide flexible borrowing capacity.
- 2The term loan is guaranteed by the parent company, Phillips 66, and matures three years from its funding date.
- 3The credit agreement includes a covenant limiting consolidated net debt-to-capitalization to 65%.
- 4Borrowings under the term loan will bear interest based on Adjusted Term SOFR or a reference rate plus a margin tied to debt ratings.
- 5Phillips 66 Company issued $750 million in 4.950% Senior Notes due 2027.
- 6Phillips 66 Company issued $500 million in 5.300% Senior Notes due 2033.
- 7Both note issuances are fully and unconditionally guaranteed by the parent company, Phillips 66.