Investor Demand Upsizes Delek Logistics’ 2033 Note Deal to $700M
Rhea-AI Filing Summary
Delek Logistics Partners (NYSE:DKL) filed an 8-K (Item 8.01) disclosing that it and Delek Logistics Finance Corp. have priced an upsized $700 million offering of 7.375% senior notes due 2033. The notes were marketed under Rule 135c and replace no prior securities noted in the filing. Proceeds will add to the partnership’s liquidity but also raise leverage and interest expense because of the relatively high coupon. Other than the inclusion of the press release (Ex. 99.1) and XBRL cover data, no additional financial statements or strategic updates were provided.
Positive
- Upsized $700 million senior notes offering indicates strong market demand and secures long-term capital until 2033
Negative
- High 7.375% coupon increases annual interest expense by an estimated $52 million and elevates leverage
Insights
TL;DR: $700 M 7.375% notes boost cash, extend tenor; leverage impact moderates benefit.
The upsizing signals solid investor demand despite a 7.375% coupon, locking in long-term funding until 2033. While the raise secures fresh capital ahead of potential rate volatility, it materially enlarges the debt stack. Without stated use-of-proceeds, it is unclear whether funds will refinance costlier maturities or finance growth capex. Net effect is liquidity positive but earnings-per-unit could face incremental interest expense of roughly $52 million annually, assuming full draw. Market should view the transaction as strategically prudent yet financially neutral.
TL;DR: High-coupon debt adds leverage, modestly weakens credit profile.
An additional $700 million at 7.375% lifts total debt and locks in a rate well above the partnership’s historical weighted average. Absent offsetting asset sales or EBITDA growth, leverage ratios will rise and fixed-charge coverage may tighten by ~70 bps. The 8-year maturity avoids near-term refinancing risk, yet the elevated coupon raises interest burden during a high-rate cycle. Overall, credit quality edges lower and balance-sheet flexibility diminishes.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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| Item 8.01 | Other Events. |
On June 25, 2025, Delek Logistics Partners, LP, a Delaware limited partnership (the “Partnership”), issued a press release in accordance with Rule 135c under the Securities Act of 1933, as amended, announcing that the Partnership and Delek Logistics Finance Corp., a Delaware corporation and wholly-owned subsidiary of the Partnership, have priced an upsized offering of $700 million in aggregate principal amount of 7.375% senior notes due 2033.
A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit Number |
Description | |
| 99.1 | Press release of Delek Logistics Partners, LP, dated June 25, 2025. | |
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: June 25, 2025 | DELEK LOGISTICS PARTNERS, LP By: Delek Logistics GP, LLC its general partner | |||||
| /s/ Robert Wright | ||||||
| Name: Robert Wright Title: Executive Vice President and Chief Financial Officer DKL (Principal Financial Officer) | ||||||
FAQ
How much capital did DKL raise in its June 2025 note offering?
What is the interest rate and maturity of Delek Logistics’ new debt?
When was the press release about the senior notes issued?
Does the 8-K disclose how DKL will use the $700 million proceeds?
Which subsidiary co-issued the 7.375% senior notes with DKL?
