8-KOther Events

VALERO ENERGY CORP/TX 8-K Report (Jun 30, 2000)

Filed June 30, 2000For Securities:VLO

Summary

Valero Energy Corporation (VLO) filed an 8-K on June 29, 2000, reporting on two significant financing transactions that closed on June 28 and June 29, 2000. The company successfully completed a public offering of 6,900,000 7 3/4% Premium Equity Participating Security Units (PEPS Units) and two note offerings totaling $400,000,000. These included $200,000,000 in 8 3/8% Notes due 2005 and $200,000,000 in 8 3/4% Notes due 2030. These transactions were conducted under existing shelf registration statements, indicating a strategic move by Valero to secure long-term capital. The filing details various agreements related to the PEPS Units and Notes, including trust declarations, guarantee agreements, purchase contracts, pledge agreements, remarketing agreements, and indentures. This information is crucial for investors to understand Valero's capital structure and its approach to debt and equity financing as it pursued growth or operational strategies at the time.

Key Highlights

  • 1Valero Energy Corporation completed a public offering of 6,900,000 7 3/4% PEPS Units on June 28, 2000.
  • 2The company also issued $200,000,000 of 8 3/8% Notes due 2005 on June 29, 2000.
  • 3Valero further issued $200,000,000 of 8 3/4% Notes due 2030 on June 29, 2000.
  • 4These offerings were registered under existing shelf registration statements (Nos. 333-33846, 333-33846-01, 333-33846-02).
  • 5The PEPS Units involved VEC Trust I, with associated agreements including a Declaration of Trust, Guarantee Agreement, and Purchase Contract.
  • 6The Notes offerings were supported by an Officer's Certificate and an Indenture.
  • 7Key financial entities like The Bank of New York and Bank One Trust Company, N.A. were involved in various capacities for these transactions.

Frequently Asked Questions

Valero Energy Corporation reported the successful closing of two public offerings: one for 6,900,000 Premium Equity Participating Security Units (PEPS Units) with a 7 3/4% coupon, and another for $400,000,000 in aggregate principal amount of notes, split between $200,000,000 of 8 3/8% Notes due 2005 and $200,000,000 of 8 3/4% Notes due 2030.

The filing doesn't explicitly state the reason, but issuing these securities under shelf registration statements suggests Valero was strategically raising capital. This capital could be for general corporate purposes, expansion, acquisitions, or refinancing existing debt, common activities for energy companies.

PEPS Units likely represent a hybrid security, possibly combining features of equity and debt, designed to offer investors specific participation or premium characteristics, along with a fixed coupon rate. The involvement of VEC Trust I and associated agreements like the Guarantee and Purchase Contract indicate a structured financing approach for these units.

Several financial institutions played roles in these transactions. The Bank of New York was involved in the Purchase Contract Agreement, Pledge Agreement, and First Supplemental Indenture related to the Notes. Bank One Trust Company, N.A. was a party to the Pledge Agreement. Morgan Stanley & Co. Incorporated acted as a Remarketing Agent for the PEPS Units.