Holly To Offer $100M In Senior Notes

DALLAS (AP) — Holly Corp. on Wednesday said it will offer $100 million in senior unsecured notes to partly fund its pending purchase of a refinery.

The independent petroleum refiner and marketer said net proceeds will pay for the cash portion of its $128.5 million pending acquisition of Sinclair Oil Corp.'s refinery in Tulsa, Okla., and a portion of the price of related inventory. Holly plans to pay for the refinery with $54.5 million in cash and $74 million in its common stock.

If the refinery acquisition falls through, Holly will use the proceeds for general corporate purposes, including working capital, capital spending and possible future acquisitions.

The senior notes will be an additional issuance of Holly's 9.875 percent senior notes due 2017, and will be treated as a single class with existing notes.

Moody's on Wednesday said it has assigned a "B1" rating to the proposed offering. The ratings service also affirmed its "Ba3" corporate family rating, its "Ba3" probability of default rating and existing "B1" senior unsecured note rating in response to Holly's pending acquisition.

Holly shares gained $1.51, or 4.8 percent, to $32.77 in afternoon trading.