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JPMorgan Chase Leads Lenders in Tesoro’s New $2B Credit Facility

October 04, 2016, 07:13 AM
Filed Under: Energy

Tesoro Corporation announced that the company has entered into a new senior secured revolving credit agreement with a group of banks led by JPMorgan Chase Bank. The new $2.0 billion, four-year cash flow credit facility replaces Tesoro`s previous $3.0 billion asset-based credit facility, which was scheduled to mature in November 2019. The new facility is not subject to borrowing base redeterminations, which might otherwise reduce credit availability.

While the new credit facility is currently guaranteed by certain Tesoro subsidiaries and collateral, these guarantees and collateral will be released and the facility will become unsecured upon Tesoro achieving an investment grade credit rating from either Moody`s Investors Service or S&P Global Ratings.

The new credit facility, which matures in September 2020, can be expanded up to an aggregate $2.25 billion prior to Tesoro achieving an investment grade rating and $3.0 billion upon Tesoro achieving an investment grade rating.

"This new credit facility, along with our continued strong cash generation and capital allocation discipline, provides us with the financial flexibility to achieve our strategic growth objectives while optimizing our capital structure and strengthening our credit profile," said Steven Sterin, Executive Vice President and CFO. "We remain committed to driving shareholder value creation by focusing on growing the company and operating with financial discipline. We believe this improved credit facility brings us closer to becoming investment grade."

Tesoro Corporation, a Fortune 100 company, is an independent refiner and marketer of petroleum products. Tesoro, through its subsidiaries, operates seven refineries in the western United States with a combined capacity of over 895,000 barrels per day and ownership in a logistics business, which includes an interest in Tesoro Logistics LP (TLLP) and ownership of its general partner. Tesoro`s retail-marketing system includes over 2,400 retail stations under the ARCO®, Shell®, Exxon®, Mobil®, USA Gasoline(TM), Rebel(TM) and Tesoro® brands.

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