Item 8.01 Other Events
On March 24, 2022, HF Sinclair Corporation (the "Company"), commenced private
offers to all Eligible Holders (as defined in the press release) to exchange
(the "Exchange Offers") any and all outstanding 2.625% Senior Notes due 2023,
5.875% Senior Notes due 2026 and 4.500% Senior Notes due 2030 (the "HFC Notes")
issued by HollyFrontier Corporation ("HFC"), for new notes to be issued by the
Company and cash, pursuant to the terms and subject to the conditions set forth
in a confidential exchange offer memorandum and consent solicitation statement,
dated March 24, 2022 (the "Exchange Offer Memorandum").
In conjunction with the Exchange Offers, the Company is soliciting the consents
(collectively, the "Consent Solicitations") of the Eligible Holders to adopt
certain proposed amendments to the indenture governing the HFC Notes (as
supplemented for each particular series of existing HFC Notes, the "HFC
Indenture") to, among other things, eliminate from the HFC Indenture, as it
relates to each series of HFC Notes (i) substantially all of the restrictive
covenants, (ii) certain of the events which may lead to an "Event of Default",
(iii) the SEC reporting covenant and (iv) with respect to HFC's 2.625% Senior
Notes due 2023 (the "HFC 2023 Notes") and HFC's 4.500% Senior Notes due 2030
(the "HFC 2030 Notes") only, the offer to purchase HFC 2023 Notes and HFC 2030
Notes upon certain change of control triggering events (collectively, the
"Proposed Amendments"). The Proposed Amendments will become effective with
respect to a particular series of HFC Notes to the extent (i) participation in
the Exchange Offer by such series of HFC Notes exceeds 50% of the outstanding
principal amount of such series and (ii) all tendered HFC Notes of such series
are accepted for exchange in the related Exchange Offer. Eligible Holders of HFC
Notes that tender such HFC Notes will be deemed to have given consent to the
Proposed Amendments (in respect of the applicable series of HFC Notes tendered).
Eligible Holders will not be permitted to tender their HFC Notes without
delivering consents or to deliver consents without tendering their HFC Notes.
Tenders of HFC Notes may not be withdrawn after the earlier of (i) 5:00 p.m.,
New York City time, on the Early Participation Date (as defined below), and
(ii) the date the applicable supplemental indenture to the corresponding HFC
Indenture implementing the applicable Proposed Amendments is executed, unless
extended (such date and time, as the same may be extended, the "Withdrawal
Deadline"), except in the limited circumstances where additional withdrawal
rights are required by law. A valid withdrawal of tendered HFC Notes will also
constitute the revocation of the related consent with respect to the applicable
HFC Indenture. As used herein, a "valid withdrawal" means valid withdrawal prior
to the Withdrawal Deadline.
The Exchange Offers and the Consent Solicitations will expire at 5:00 p.m., New
York City time, on April 22, 2022, unless extended or earlier terminated (such
time and date, as the same may be extended, the "Expiration Date"). However,
Eligible Holders who validly tender and do not validly withdraw their HFC Notes
at or prior to 5:00 p.m., New York City time, on April 6, 2022 (as the same may
be extended, the "Early Participation Date"), will be eligible to receive
greater consideration for their HFC Notes than will be available for tenders
made after the Early Participation Date but at or prior to the Expiration Date,
all as more fully described in the attached press release and in the Exchange
Offer Memorandum.
The Company will return to HFC all HFC Notes which are validly tendered and
accepted pursuant to the Exchange Offers (the "Returned Notes"), and HFC will
cancel such Returned Notes.
The Exchange Offers and Consent Solicitations are being made solely pursuant to
the conditions set forth in the Exchange Offer Memorandum in a private offering
exempt from, or not subject to, registration under the Securities Act of 1933,
as amended, and are subject to certain conditions set forth in the Exchange
Offer Memorandum, although the Company may waive any such conditions at any
time.
The Company and HFC are in discussions with the current lending group under
HFC's Senior Unsecured 5-Year Revolving Credit Agreement, dated July 1, 2014 (as
amended, restated, amended and restated, supplemented or otherwise modified as
of the date hereof), among HFC, as borrower, and MUFG Bank, Ltd. (formerly known
as The Bank of Tokyo Mitsubishi, Ltd.), as administrative agent, and each of the
financial institutions party thereto as lenders (the "HFC Credit Agreement"), to
either obtain a consent under or amendment to the HFC Credit Agreement or enter
into a new credit facility, in each case to make the Company the borrower
thereunder, to close contemporaneously with the settlement of the Exchange
Offers and Consent Solicitations described in the Exchange Offer Memorandum. No
assurances can be given, however, as to whether we will do so or as to the terms
of any amended or new credit facility.
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Please carefully review the attached press release for further details regarding
the Exchange Offers and Consent Solicitations. A copy of the Company's and HFC's
press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and
incorporated herein by reference.
This announcement does not constitute an offer to sell or purchase, or a
solicitation of an offer to sell or purchase, or the solicitation of tenders or
consents with respect to, any security. No offer, solicitation, purchase or sale
will be made in any jurisdiction in which such an offer, solicitation, or sale
would be unlawful. The Exchange Offers and Consent Solicitations are being made
solely pursuant to the Exchange Offer Memorandum and only to such persons and in
such jurisdictions as is permitted under applicable law.
Cautionary Statement Regarding Forward-Looking Statements
The following is a "safe harbor" statement under the Private Securities
Litigation Reform Act of 1995: The statements in this Current Report on Form 8-K
relating to matters that are not historical facts are "forward-looking
statements" based on management's beliefs and assumptions using currently
available information and expectations as of the date hereof, are not guarantees
of future performance and involve certain risks and uncertainties, including
those contained in our filings with the Securities and Exchange Commission.
Forward-looking statements use words such as "anticipate," "project," "will,"
"expect," "plan," "goal," "forecast," "strategy," "intend," "should," "would,"
"could," "believe," "may," and similar expressions and statements regarding our
plans and objectives for future operations. Although we believe that the
expectations reflected in these forward-looking statements are reasonable, we
cannot assure you that our expectations will prove correct. Therefore, actual
outcomes and results could materially differ from what is expressed, implied or
forecast in such statements. Any differences could be caused by a number of
factors, including, but not limited to, the Company's and Holly Energy Partner,
L.P.'s ("HEP") ability to successfully integrate the operations of The Sinclair
Companies ("Sinclair") with its existing operations and fully realize the
expected synergies of the Sinclair transactions or on the expected timeline;
risks relating to the value of the Company's common stock and the value of HEP's
limited partner common units from sales by the Sinclair holders following the
closing of the Sinclair transactions; the Company's ability to successfully
integrate the operation of the Puget Sound refinery with its existing
operations; the demand for and supply of crude oil and refined products,
including uncertainty regarding the effects of the continuing coronavirus
("COVID-19") pandemic on future demand and increasing societal expectations that
companies address climate change; risks and uncertainties with respect to the
actions of actual or potential competitive suppliers and transporters of refined
petroleum products or lubricant and specialty products in the Company's markets;
the spread between market prices for refined products and market prices for
crude oil; the possibility of constraints on the transportation of refined
products or lubricant and specialty products; the possibility of inefficiencies,
curtailments or shutdowns in refinery operations or pipelines, whether due to
infection in the workforce or in response to reductions in demand; the effects
of current and/or future governmental and environmental regulations and
policies, including the effects of current and/or future restrictions on various
commercial and economic activities in response to the COVID-19 pandemic; the
availability and cost of financing to the Company; the effectiveness of the
Company's capital investments and marketing strategies; the Company's and HEP's
efficiency in carrying out and consummating construction projects, including the
Company's ability to complete announced capital projects, such as the
construction of the Artesia renewable diesel unit and pretreatment unit, on time
and within capital guidance; the Company's and HEP's ability to timely obtain or
maintain permits, including those necessary for operations or capital projects;
the ability of the Company to acquire refined or lubricant product operations or
pipeline and terminal operations on acceptable terms and to integrate any
existing or future acquired operations; the possibility of terrorist or
cyberattacks and the consequences of any such attacks; uncertainty regarding the
effects and duration of global hostilities and any associated military campaigns
which may disrupt crude oil supplies and markets for our refined products and
create instability in the financial markets that could restrict our ability to
raise capital; general economic conditions, including uncertainty regarding the
timing, pace and extent of an economic recovery in the United States; a
prolonged economic slowdown due to the COVID-19 pandemic which could result in
an impairment of goodwill and/or long-lived asset impairments; the outcome of
the Exchange Offers and Consent Solicitations; and other financial, operational
and legal risks and uncertainties detailed from time to time in the Company's,
HFC's and HEP's Securities and Exchange Commission filings. The forward-looking
statements speak only as of the date made and, other than as required by law, we
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
99.1 Press Release of HF Sinclair Corporation and HollyFrontier
Corporation, dated March 24, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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