Sunoco Logistics Partners L.P. (NYSE:SXL) Offering Units To Raise Funds

Sunoco Logistics Partners L.P. (NYSE:SXL) has taken the route of diluting its units to raise money to support various projects, mainly borrowing repayment. The logistics company is offering millions of its units and has granted underwriters to purchase millions more units to cover oversubscription. Sunoco missed earnings estimates in its most recent quarter.

Do analyst foresee a double-top for SXL?

The owner and operator of logistic assets such as pipeline and terminals, Sunoco, has priced the secondary offering of 13.5 million units in a secondary offering. Each unit in the offering has been priced at $41.76. The company has also allowed underwriters leave to purchase more than 2 million units in case of overallotment.

The pricing of the common units comes after previous announcement by Sunoco Logistics Partners L.P. (NYSE:SXL) about a plan to raise money from the capital market.

Revolving credit facility

According to the management, the money raised through the secondary offering will go to repaying their borrowing obligation under a $1.5 billion credit facility. Some of the money will be channeled to general financial needs of the entity. It is currently unclear the exact amount of net proceeds that the Sunoco Logistics Partners L.P. (NYSE:SXL) will generate from the sale of the units.

Sunoco Logistics Partners L.P. (NYSE:SXL) company has tapped institutions that include Wells Fargo & Co. (NYSE:WFC), Morgan Stanley (NYSE:MS), JPMorgan Chase & Co. (NYSE:JPM) and others to help with the offering.

Stock rating

On the average, Wall Street has a “Hold” rating on the stock of Sunoco and a consensus target price of $46.63.

Financial performance

In the most recent quarter, Sunoco Logistics Partners L.P. (NYSE:SXL) generated revenue of $3.88 billion, which decline from the previous quarter. The company had more than $4.9 billion in revenue in the preceding quarter. Revenue fell 9.6% YoY. However, revenue growth has been above the industry average.

Units of Sunoco Logistics Partners L.P. (NYSE:SXL) have declined more than 4% so far this year.

 

Enter Email Here

START HERE: Get Your
FREE Report On This Stock

To reeive our FREE investing report and weekly alerts, enter your information below!

Your privacy is important to us. We’ll never share your information.

 

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of USmarketsDaily.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:

https://www.USmarketsDaily.com/disclaimer

 











 

David Barry

David Barry

Barry is a senior journalist at Us Markets Daily. He reports, shoots and edits many of his own stories by himself.