Already a Bloomberg.com user?
Sign in with the same account.
Tesoro Corp. (TSO) set the rate it will pay on a $500 million covenant-lite term loan it’s seeking to support its acquisition of BP Plc’s Southern California refining and marketing business, according to a person with knowledge of the transaction.
The debt, due in 2016, will pay interest at 2.75 percentage points more than the London interbank offered rate, said the person, who asked not to be identified because the information is private.
Tesoro is proposing to sell the loan at 99.75 cents on the dollar to par, according to the person.
Lenders are being offered one-year soft-call protection of 101 cents, meaning the company would have to pay 1 cent more than face value to refinance the debt during the first year, the person said.
JPMorgan Chase & Co. is arranging the financing for the San Antonio-based independent petroleum refiner and marketer, according to data compiled by Bloomberg.
An e-mail sent to Tesoro seeking comment wasn’t immediately returned.
Covenant-lite debt doesn’t carry typical lender protection such as financial-maintenance requirements.
To contact the reporter on this story: Michael Amato in New York at email@example.com
To contact the editor responsible for this story: Faris Khan at firstname.lastname@example.org