Delek Logistics Partners Prices Upsized $700 Million Senior Notes Offering
Delek Logistics Partners, LP (“Delek Logistics”), a prominent midstream energy company, has announced the pricing of an upsized offering of $700 million aggregate principal amount of 7.375% senior notes due 2033 (the “Notes”). The offering, which was priced at par, was conducted in partnership with Delek Logistics Finance Corp., a wholly owned subsidiary of Delek Logistics, and marks a strategic move aimed at refinancing existing debt and optimizing the company’s capital structure.
The Notes are expected to be issued and the transaction closed on or around June 30, 2025, subject to customary closing conditions. The net proceeds from the offering will be used primarily to repay a portion of the borrowings currently outstanding under Delek Logistics’ revolving credit facility. By doing so, the company seeks to enhance its financial flexibility, extend its debt maturity profile, and strengthen its overall liquidity position.
A Strategic Financial Move Amid Market Opportunities
This upsized $700 million offering underscores Delek Logistics’ ability to access capital markets efficiently, reflecting investor confidence in the company’s long-term business strategy and cash flow stability. Originally anticipated to be smaller, the offering was upsized in response to strong demand from institutional investors, signaling robust market appetite for Delek Logistics’ credit profile and growth prospects.
The 7.375% interest rate on the Notes, set with a maturity date in 2033, reflects current market conditions and interest rate expectations. This fixed-income instrument provides long-term investors with a relatively high yield backed by a stable midstream operator, while providing Delek Logistics with predictable financing costs over nearly a decade.
Use of Proceeds and Debt Management
According to the company, the proceeds from the offering will be used to reduce borrowings under its revolving credit facility. This strategy not only lowers the company’s reliance on short-term debt but also helps preserve revolving credit capacity for potential future investments, operational needs, or acquisition opportunities.
Delek Logistics’ revolving credit facility is an important tool for managing working capital and liquidity. By paying down this facility with the proceeds from the Notes, the company is effectively shifting from short-term variable-rate debt to long-term fixed-rate debt — a prudent move in a volatile interest rate environment.
This refinancing transaction may also be expected to generate incremental interest expense savings or shield the company from potential future interest rate hikes, depending on market trends. Moreover, by securing long-term capital through the Notes, Delek Logistics positions itself to remain resilient and agile in a highly competitive and capital-intensive industry.
Private Placement Offering Details
The Notes are being offered through a private placement and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or under any state securities laws. As such, the Notes may only be sold to qualified institutional buyers in accordance with Rule 144A under the Securities Act or to non-U.S. persons under Regulation S.
This private placement structure enables Delek Logistics to complete the offering more efficiently without undergoing the full registration process typically required for public offerings. However, investors should be aware that the Notes will be subject to resale restrictions and may only be traded among qualified parties.
The Notes will be fully and unconditionally guaranteed on a senior unsecured basis by Delek Logistics Partners LP and certain of its domestic subsidiaries that guarantee existing indebtedness.
This announcement is issued in accordance with Rule 135c of the Securities Act, which allows for limited public disclosure of certain information relating to unregistered securities offerings. It does not constitute an offer to sell, nor a solicitation of an offer to buy, the Notes or any other securities, and it is not intended for distribution in any jurisdiction where such an offer or solicitation would be unlawful.
Delek Logistics’ Financial Strategy and Business Overview
Founded in 2012 and headquartered in Brentwood, Tennessee, Delek Logistics Partners, LP operates a network of logistics assets, including pipelines, storage terminals, and transportation services, primarily supporting the downstream operations of Delek US Holdings and other third-party customers. The company plays a vital role in transporting and storing crude oil, intermediate products, and refined petroleum products across key regions of the United States, particularly in the Gulf Coast and midcontinent regions.
Delek Logistics continues to pursue a growth-oriented strategy focused on enhancing asset utilization, investing in infrastructure projects, and expanding third-party revenue streams. The company benefits from long-term, fee-based contracts that provide a stable cash flow profile and support its commitment to maintaining and growing unitholder distributions.
As of its latest financial reports, Delek Logistics has demonstrated consistent operational performance and financial discipline. In recent quarters, the company has reported strong earnings and cash flows, supported by rising U.S. energy demand, favorable commodity cycles, and increased throughput volumes across its logistics network.
This latest debt offering is consistent with Delek Logistics’ ongoing efforts to optimize its capital structure, balance its cost of capital, and ensure ample liquidity to support both organic growth and potential acquisitions.
Outlook and Investor Confidence
The success and upsizing of this offering signal strong investor confidence in Delek Logistics’ long-term business outlook. Despite ongoing macroeconomic uncertainty and energy market volatility, the company has shown resilience and strategic foresight in navigating changing financial conditions.
Furthermore, by locking in long-term fixed-rate debt in the current environment, Delek Logistics is taking a forward-looking approach to mitigate potential refinancing risk and interest rate volatility, while enhancing its ability to fund long-term initiatives.
This latest transaction follows a series of capital market activities undertaken by energy infrastructure firms in 2024 and 2025, as companies seek to refinance at favorable terms ahead of potential market tightening. Analysts expect that Delek Logistics will continue to evaluate capital markets opportunistically, maintaining a balanced approach to growth, distribution coverage, and financial health.
With the successful pricing of $700 million in senior notes due 2033, Delek Logistics Partners has taken a significant step toward enhancing its long-term financial stability. The transaction not only provides immediate benefits through debt repayment and liquidity enhancement but also positions the company for continued strategic growth in the years ahead.
As Delek Logistics continues to invest in infrastructure and strengthen its logistics footprint, its disciplined approach to capital markets and focus on operational excellence will remain critical drivers of value creation for unitholders and stakeholders alike.