Northern Tier Sells $275M in HY

Northern Tier Energy sold $275 million in a high yield bond deal.

The Ridgefield, Conn.-based oil and gas provider issued the 7.125% senior secured notes due 2020 at par and below price talk of 7.25%. It plans to use the proceeds to finance a tender offer for all of its outstanding 10.5% senior secured notes due 2017.

As of Oct. 30, bondholders agreed to tender $253 million of the notes. There was approximately $290 million in the 2017 notes outstanding as of June30, according to an early September regulatory filing.

Bondholders will get $1,150 per $1,000 tendered by 5 p.m. Nov. 1, which includes a consent payment of $30 per $1,000. The early tender deadline was extended from Oct. 30 because of financial markets being affected by Hurricane Sandy. Bondholders who tender after Nov. 1 will receive $1,120 for each $1,000 tendered. The tender offer expires Nov. 14.

Goldman Sachs was the lead bookrunner on the bond offering.

Moody’s Investors Service rated the bonds B1 and maintains B1 corporate family and probability of default ratings on the company. Standard & Poor’s holds a B+ corporate credit rating on Northern Tier and rated the bonds BB-.