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Valero Energy Corporation Announces the Pricing Terms of its Pending Maximum Tender Offer

·11-min read

SAN ANTONIO, December 03, 2021--(BUSINESS WIRE)--Valero Energy Corporation (NYSE: VLO, "Valero") announced today the pricing terms of its previously announced cash tender offer (the "Maximum Tender Offer") for up to an increased maximum aggregate purchase price which, after giving effect to the elimination of the Series Tender Cap (as defined in the Offer to Purchase dated November 18, 2021 (the "Offer to Purchase")) for the 2024 Notes (as defined below), is sufficient to purchase all of the 2039 Notes (as defined below) validly tendered and not validly withdrawn at or prior to the Early Tender Date (as defined below) (such increased maximum aggregate purchase price, the "Maximum Aggregate Purchase Price") of its outstanding 1.200% Senior Notes due 2024 (the "2024 Notes"), its outstanding 3.650% Senior Notes due 2025 (the "3.650% 2025 Notes"), its outstanding 2.850% Senior Notes due 2025 (the "2.850% 2025 Notes"), its outstanding 10.500% Senior Notes due 2039 (the "2039 Notes"), its outstanding 8.750% Senior Notes due 2030 (the "2030 Notes"), its outstanding 7.500% Senior Notes due 2032 (the "2032 Notes") and its outstanding 6.625% Senior Notes due 2037 (the "2037 Notes") and the outstanding 4.375% Senior Notes due 2026 issued by Valero Energy Partners LP and guaranteed by Valero (the "2026 Notes" and, together with the 2024 Notes, the 3.650% 2025 Notes, the 2.850% 2025 Notes, the 2039 Notes, the 2030 Notes, the 2032 Notes and the 2037 Notes, the "Maximum Tender Offer Notes"). The terms and conditions of the Maximum Tender Offer are described in the Offer to Purchase.

As of 5:00 p.m., New York City time, on December 2, 2021 (the "Early Tender Date"), as reported by D.F. King & Co., Inc., the tender and information agent for the Maximum Tender Offer, the aggregate principal amount of each of the 2024 Notes, 3.650% 2025 Notes, 2026 Notes and 2039 Notes listed in the table below had been validly tendered and not validly withdrawn. The applicable Reference Yield, Repurchase Yield, Early Tender Payment and Total Consideration (each as defined more fully in the Offer to Purchase) with respect to the 2024 Notes, 3.650% 2025 Notes, 2026 Notes and 2039 Notes accepted for purchase are detailed in the table below.

Title of
Security

CUSIP/ISIN

Initial
Principal
Amount

Acceptance
Priority Level

U.S. Treasury
Reference
Security

Reference
Yield

Fixed
Spread

Repurchase
Yield

Aggregate
Principal
Amount Tendered

Early
Tender
Payment
(1)(2)

Total
Consideration
(1)(2)

Aggregate
Principal
Amount
Expected to
be Accepted

1.200% Senior Notes due 2024

91913YBA7 / US91913YBA73

$925,000,000

1

0.75% UST due 11/15/2024

0.917%

+20 bps

1.117%

$755,876,000

$30

$1,001.86

$755,876,000

3.650% Senior Notes due 2025

91913YAS9 / US91913YAS90

$600,000,000

2

1.125% UST due 10/31/2026

1.219%

+10 bps

1.319%

$275,741,000

$30

$1,074.46

$275,741,000

4.375% Senior Notes due 2026(3)

91914JAA0 / US91914JAA07

$500,000,000

3

1.125% UST due 10/31/2026

1.219%

+55 bps

1.769%

$256,270,000

$30

$1,118.84

$124,259,000

10.500% Senior Notes due 2039

91913YAP5 / US91913YAP51

$250,000,000

5

2.00% UST due 11/15/2041

1.856%

+175 bps

3.606%

$137,013,000

$30

$1,880.56

$137,013,000

(1)

Per $1,000 principal amount.

(2)

The Total Consideration for each series of Maximum Tender Offer Notes validly tendered prior to or at the Early Tender Date and accepted for purchase is calculated using the applicable fixed spread shown in the table above and is inclusive of the Early Tender Payment for such series of Maximum Tender Offer Notes.

(3)

Issued by Valero Energy Partners LP and guaranteed by Valero.

Because the aggregate principal amount of Maximum Tender Offer Notes validly tendered and not validly withdrawn at or prior to the Early Tender Date has an aggregate purchase price that exceeds the Maximum Aggregate Purchase Price, Valero does not expect to accept for purchase all Maximum Tender Offer Notes that have been validly tendered and not validly withdrawn at or prior to the Early Tender Date. Rather, subject to the Maximum Aggregate Purchase Price, the Series Tender Cap (as defined in the Offer to Purchase) applicable to the 3.650% 2025 Notes, 2026 Notes and 2.850% 2025 Notes, and the acceptance priority levels set forth in the table above, in each case as further described in the Offer to Purchase, Valero will accept for purchase 2024 Notes, 3.650% 2025 Notes, 2026 Notes and 2039 Notes validly tendered and not validly withdrawn at or prior to the Early Tender Date and does not expect to accept for purchase any 2.850% 2025 Notes, 2030 Notes, 2032 Notes or 2037 Notes. As a result, a holder who validly tenders and does not validly withdraw Maximum Tender Offer Notes pursuant to the Maximum Tender Offer may have all or a portion of its Maximum Tender Offer Notes returned to it.

On the Maximum Tender Early Settlement Date (as defined below), Valero will pay the Total Consideration (as shown in the table above for the 2024 Notes, 3.650% 2025 Notes, 2026 Notes and 2039 Notes) for each $1,000 principal amount of each of the 2024 Notes, 3.650% 2025 Notes, 2026 Notes and 2039 Notes validly tendered and not validly withdrawn at or prior to the Early Tender Date and accepted for purchase. The Total Consideration was calculated in the manner described in the Offer to Purchase by reference to the applicable fixed spread specified in the table above plus the applicable yield to maturity based on the bid-side price of the applicable U.S. Treasury Reference Security specified in the table above at 10:00 a.m., New York City time, on December 3, 2021. The Total Consideration also includes the Early Tender Payment (as shown in the table above for the 2024 Notes, 3.650% 2025 Notes, 2026 Notes, and 2039 Notes) for each $1,000 principal amount of each of the 2024 Notes, 3.650% 2025 Notes, 2026 Notes, and 2039 Notes validly tendered and not validly withdrawn at or prior to the Early Tender Date and accepted for purchase. Payments for the 2024 Notes, 3.650% 2025 Notes, 2026 Notes and 2039 Notes accepted for purchase will include accrued and unpaid interest from the last interest payment date applicable to the relevant series of Maximum Tender Offer Notes up to, but excluding, the settlement date for Maximum Tender Offer Notes that are validly tendered and not validly withdrawn at or prior to or at the Early Tender Date and accepted for purchase (the "Maximum Tender Early Settlement Date"). It is anticipated that the Maximum Tender Early Settlement Date will be December 6, 2021, the second business day after the Early Tender Date.

The Maximum Tender Offer will expire at midnight, New York City time, at the end of December 16, 2021 (the "Maximum Tender Expiration Date"), unless extended or earlier terminated. Because the Maximum Tender Offer has been fully subscribed as of the Early Tender Date, holders who tender Maximum Tender Offer Notes after the Early Tender Date will not have any of their Maximum Tender Offer Notes accepted for purchase, unless Valero elects to increase or eliminate the Maximum Aggregate Purchase Price. Any Maximum Tender Offer Notes tendered after the Early Tender Date, together with any Maximum Tender Offer Notes tendered at or prior to the Early Tender Date but not accepted for purchase by Valero, will be returned to the holders thereof as described in the Offer to Purchase, unless Valero elects to increase or eliminate the Maximum Aggregate Purchase Price.

The withdrawal deadline for the Maximum Tender Offer was 5:00 p.m., New York City time, on December 2, 2021 and has not been extended. Accordingly, previously tendered Maximum Tender Offer Notes and Maximum Tender Offer Notes tendered after such withdrawal deadline may not be withdrawn, subject to applicable law.

Valero’s obligation to accept for payment and to pay for the Maximum Tender Offer Notes validly tendered and not validly withdrawn in the Maximum Tender Offer is subject to the satisfaction or waiver of a number of conditions described in the Offer to Purchase. The Maximum Tender Offer may be terminated or withdrawn in whole or terminated or withdrawn with respect to any series of Maximum Tender Offer Notes, subject to applicable law. Valero reserves the right, subject to applicable law, to (1) waive any and all conditions to the Maximum Tender Offer, (2) extend or terminate the Maximum Tender Offer, (3) increase, decrease or eliminate the Maximum Aggregate Purchase Price and/or any Series Tender Cap or (4) otherwise amend the Maximum Tender Offer in any respect.

Valero has retained J.P. Morgan Securities LLC and Citigroup Global Markets Inc., as Lead Dealer Managers, and BofA Securities, Inc., Mizuho Securities USA LLC and MUFG Securities Americas Inc., as Co-Dealer Managers (collectively, the "Dealer Managers"), for the Maximum Tender Offer. Valero has retained D.F. King & Co., Inc., as the tender and information agent, for the Maximum Tender Offer. For additional information regarding the terms of the Maximum Tender Offer, please contact: J.P. Morgan Securities LLC at (866) 834-4666 (toll free) or (212) 834-3424 (collect); or Citigroup Global Markets Inc. at (800) 831-9146. Requests for documents and questions regarding the tendering of securities may be directed to D.F. King & Co., Inc. by telephone at (212) 269-5550 (for banks and brokers only) or (800) 334-0384 (for all others, toll-free), by email at vlo@dfking.com or at www.dfking.com/vlo or to the Dealer Managers at their respective telephone numbers.

This announcement is for information purposes only and does not constitute an offer to sell, a solicitation to buy or an offer to purchase or sell any securities. The Maximum Tender Offer is being made only pursuant to the Offer to Purchase and only in such jurisdictions as is permitted under applicable law. None of Valero, the tender and information agent, the Dealer Managers or the applicable trustee with respect to the Maximum Tender Offer Notes, nor any of their affiliates, makes any recommendation as to whether holders should tender or refrain from tendering all or any portion of their Maximum Tender Offer Notes in response to the Maximum Tender Offer.

Safe-Harbor Statement

Statements contained in this press release that state Valero’s or its management’s expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words "anticipate," "believe," "expect," "plan," "intend," "scheduled," "estimate," "project," "projection," "predict," "budget," "forecast," "goal," "guidance," "target," "could," "would," "should," "may," "strive," "seek," "potential," "opportunity," "aimed," "considering," "continue," and similar expressions identify forward-looking statements. Forward-looking statements in this press release include those relating to, the expiration date and the settlement date for the Maximum Tender Offer. It is important to note that actual results could differ materially from those projected in such forward-looking statements based on numerous factors, including those outside of Valero’s control, such as legislative or political changes or developments, market dynamics, cyberattacks, weather events, and other matters affecting our operations or the demand for our products. These factors also include, but are not limited to, the uncertainties that remain with respect to the COVID-19 pandemic, variants of the virus, governmental and societal responses thereto, including requirements and mandates with respect to vaccines, vaccine distribution and administration levels, and the adverse effects the foregoing may have on our business or economic conditions generally. For more information concerning these and other factors that could cause actual results to differ from those expressed or forecasted, see Valero’s annual report on Form 10-K, the "Risk Factors" section included in the Offer to Purchase, quarterly reports on Form 10-Q, and other reports filed with the Securities and Exchange Commission.

About Valero

Valero Energy Corporation, through its subsidiaries (collectively, "Valero"), is an international manufacturer and marketer of transportation fuels and petrochemical products. Valero is a Fortune 500 company based in San Antonio, Texas, and owns 15 petroleum refineries with a combined throughput capacity of approximately 3.2 million barrels per day and 12 ethanol plants with a combined production capacity of approximately 1.6 billion gallons per year. The petroleum refineries are located in the United States (U.S.), Canada and the United Kingdom (U.K.), and the ethanol plants are located in the Mid-Continent region of the U.S. Valero is also a joint venture partner in Diamond Green Diesel, which owns and operates a renewable diesel plant in Norco, Louisiana. Diamond Green Diesel owns North America’s largest biomass-based diesel plant. Valero sells its products in the wholesale rack or bulk markets in the U.S., Canada, the U.K., Ireland and Latin America. Approximately 7,000 outlets carry Valero’s brand names.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211203005433/en/

Contacts

Investors:

Homer Bhullar, Vice President – Investor Relations and Finance, 210-345-1982
Eric Herbort, Senior Manager – Investor Relations, 210-345-3331
Gautam Srivastava, Senior Manager – Investor Relations, 210-345-3992

Media:

Lillian Riojas, Executive Director – Media Relations and Communications, 210-345-5002

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