Delek stock falls on $400M convertible notes offering

Investing.com -- Delek US Energy Inc (NYSE: DK) shares dropped 6% Thursday after the company announced plans to offer $400 million in convertible senior notes due 2031.

The Brentwood, Tennessee-based energy company said it intends to conduct a private offering of the notes, with initial purchasers receiving an option to buy an additional $60 million in aggregate principal amount within 13 days of the initial closing date.

The notes will be senior unsecured obligations of the company, maturing on November 1, 2031, unless earlier converted, redeemed or repurchased. The notes will be convertible only upon satisfaction of certain conditions prior to August 1, 2031, and thereafter convertible at any time until two trading days before maturity. The company will satisfy conversions by paying cash and, if applicable, delivering shares of common stock.

Delek US cannot redeem the notes before November 6, 2029, except in the event of a cleanup redemption. After that date, the notes will be redeemable in whole or in part at the company's option, subject to certain conditions.

The notes are being offered only to qualified institutional buyers under Rule 144A of the Securities Act of 1933. The company's refining assets include refineries in Tyler and Big Spring, Texas, El Dorado, Arkansas and Krotz Springs, Louisiana, with combined nameplate crude throughput capacity of 302,000 barrels per day.

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