Sunoco LP Announces Upsized Private Offering of Senior Notes to Fund Strategic Debt Redemptions and Support Partnership Operations
Sunoco LP, a leading energy infrastructure and fuel distribution master limited partnership, has announced the successful pricing of a significant private offering of senior notes, underscoring its commitment to strategic capital management and financial flexibility. The offering includes two tranches of senior notes: 5.375% notes due 2031 with an aggregate principal amount of $600 million (“2031 notes”), and 5.625% notes due 2034, also totaling $600 million in principal (“2034 notes”). Collectively, these two offerings are referred to as the “notes.”
The offering represents an upsizing from the initial plan, which called for $500 million in aggregate principal for each tranche. The decision to increase the size reflects strong investor demand and confidence in Sunoco’s financial strategy, as well as the Partnership’s robust market position in the energy infrastructure and fuel distribution sectors. The notes are priced at 100% of their principal value, signaling a successful execution of the offering. The settlement of the offering is expected to occur on March 9, 2026, contingent upon the satisfaction of customary closing conditions.
Sunoco intends to deploy the net proceeds from the offering toward key debt redemption objectives, demonstrating its proactive approach to capital structure optimization. Specifically, the Partnership plans to use the proceeds to redeem in full the 6.000% senior notes due 2026 issued by NuStar Logistics, L.P. (“NuStar 2026 Notes”), as well as Sunoco’s own 6.000% senior notes due 2027 (“Sunoco 2027 Notes”). Any remaining proceeds from the offering will be allocated toward general partnership purposes, which may include repayment of additional indebtedness or other strategic uses aligned with Sunoco’s operational and financial objectives. Notably, prior to redeeming the Sunoco 2027 Notes, the Partnership may utilize part of the proceeds to reduce outstanding borrowings under its revolving credit facility, further enhancing its liquidity and financial flexibility.
The notes have been offered pursuant to exemptions from registration under the Securities Act of 1933, as amended (the “Securities Act”), and applicable state securities laws. They have not been registered under the Securities Act or any state securities laws, and as such, may only be offered or sold in the United States in transactions that qualify for an exemption from registration requirements. In this context, Sunoco is targeting the sale of the notes exclusively to persons reasonably believed to be “qualified institutional buyers” under Rule 144A of the Securities Act, as well as to non-U.S. persons in transactions conducted outside the United States pursuant to Regulation S under the Securities Act. This approach allows Sunoco to access a broad institutional investor base while complying with regulatory requirements governing private placements of debt securities.
Sunoco emphasized that this news release does not constitute an offer to sell, a solicitation of an offer to buy, or a sale of any securities in any jurisdiction where such an offer, solicitation, or sale would be unlawful prior to the registration or qualification under applicable securities laws. Moreover, the announcement should not be interpreted as a notice of redemption under the governing indentures of the NuStar 2026 Notes or the Sunoco 2027 Notes. The Partnership continues to operate in full compliance with applicable regulatory frameworks while maintaining transparency with its investors regarding capital allocation decisions and debt management strategies.
Sunoco LP: Industry Leadership in Energy Infrastructure and Fuel Distribution
Sunoco LP is widely recognized as a leading energy infrastructure and fuel distribution partnership, with operations spanning North America, the Greater Caribbean, and Europe. The Partnership’s midstream infrastructure portfolio encompasses an extensive network of approximately 14,000 miles of pipelines, which play a critical role in transporting crude oil, refined products, and other energy commodities to key markets efficiently and reliably. In addition to its pipeline assets, Sunoco operates over 160 terminals strategically located to support supply chain operations, storage, and distribution of fuels and other energy products.
Complementing its midstream infrastructure, Sunoco maintains a significant presence in the downstream fuel distribution sector. The Partnership distributes more than 15 billion gallons of fuel annually through an expansive network of approximately 11,000 Sunoco and partner-branded retail locations. These locations include both company-owned and independent dealerships, catering to commercial customers, fleet operators, and individual consumers. By leveraging its integrated infrastructure and distribution network, Sunoco ensures consistent delivery of high-quality fuels across a broad geographic footprint, supporting energy reliability and accessibility for a diverse customer base.
Sunoco’s strategic focus extends beyond operational scale to include financial prudence and disciplined capital management. The recent upsized senior notes offering exemplifies the Partnership’s commitment to reducing higher-cost debt, optimizing its capital structure, and maintaining access to cost-effective financing. By redeeming the 6.000% senior notes due 2026 and 2027 with the proceeds of the new offering, Sunoco aims to lower interest expense, extend debt maturities, and enhance long-term financial stability. These measures position the Partnership to pursue growth initiatives, invest in operational improvements, and strengthen shareholder value while maintaining liquidity and flexibility in a dynamic energy market.
The offering also reflects investor confidence in Sunoco’s business model, which integrates robust infrastructure assets with a well-established retail distribution network. The combination of long-term pipeline agreements, extensive terminal operations, and a large-scale fuel distribution footprint provides Sunoco with diversified revenue streams and resilience against market volatility. This diversification, along with the Partnership’s disciplined approach to capital allocation, underpins its ability to generate sustainable cash flow and maintain a strong credit profile, which are critical factors in securing favorable financing terms in the capital markets.
Looking forward, Sunoco remains focused on leveraging its infrastructure capabilities, operational expertise, and strategic capital management to support ongoing growth and value creation. The successful pricing and upsizing of the 2031 and 2034 notes offering represents a significant step in this strategic direction, enabling the Partnership to refinance higher-cost obligations, strengthen its balance sheet, and support general corporate purposes that drive long-term operational and financial performance.
In summary, the successful private placement of Sunoco’s senior notes demonstrates the Partnership’s ability to execute complex financing transactions efficiently, while advancing its broader objectives of financial discipline, infrastructure optimization, and sustainable growth. With a robust network of pipelines, terminals, and retail fuel distribution points, combined with a proactive capital management strategy, Sunoco LP is well-positioned to continue delivering reliable energy solutions across North America, the Greater Caribbean, and Europe, meeting the needs of both commercial and retail customers while creating long-term value for its stakeholders.
