Sunoco 2011 Annual Report Download - page 98

The following table summarizes Sunoco’s debt (including current portion) by issuer (in millions of dollars):
December 31,
2011 2010
Sunoco, Inc. ........................................................ $ 964 $1,147
Sunoco Logistics Partners L.P. ......................................... 1,698 1,129
SunCoke Energy, Inc. ................................................ 726 —
Other ............................................................. 53 38
$3,441 $2,314
In July 2011, the Partnership issued $600 million of long-term debt, consisting of $300 million of 4.65
percent notes due in 2022 and $300 million of 6.10 percent notes due in 2042.
Also in July 2011, concurrent with its initial public offering (“SunCoke IPO”), SunCoke Energy issued $400
million aggregate principal of 7.625 percent notes which mature in 2019. Concurrent with its IPO, SunCoke
Energy also borrowed $300 million under a senior secured term loan credit facility which matures in 2018. The
term loan credit facility provides for incremental borrowings up to $75 million which are available subject to the
satisfaction of certain conditions. SunCoke Energy borrowed an additional $30 million under the term loan credit
facility in December 2011. The term loan credit facility will amortize in quarterly installments equal to 0.25
percent of the original principal amount of the term loan credit facility with the balance payable at maturity and
bears interest at a rate based on SunCoke Energy’s election of available alternatives which includes LIBOR (with
a floor of 1.00 percent) plus 3.00 percent. These facilities are secured on a first priority basis by a perfected
security interest in substantially all of SunCoke Energy’s and each SunCoke Energy subsidiary guarantor’s
tangible and intangible assets (subject to certain exceptions). SunCoke Energy used a portion of the proceeds
from its borrowings to repay $575 million of intercompany debt payable to a subsidiary of Sunoco in the third
quarter of 2011.
In February 2012, the Company announced that it intends to spend approximately $400 million in 2012 to
reduce debt, including $103 million of floating-rate notes that were repaid in January 2012. Interest expense is
expected to decline by approximately $15 million as a result of the planned debt repurchase.
In November 2011, Sunoco entered into an $800 million secured revolving credit agreement with a
syndicate of 17 participating banks (the “Secured Facility”) which matures in November 2012. Concurrent with
this agreement, the Company terminated its existing $1.2 billion revolving credit facility and transferred all
commitments outstanding under this facility to the Secured Facility. Borrowings under the Secured Facility may
be made up to the lesser of the total available commitments or the amount of a periodically adjusted borrowing
base which is calculated by reference to the value of collateral that includes the Company’s eligible crude oil and
refined product inventories; certain receivables from inventory sales (other than receivables generated from sales
of refined products subject to the Company’s existing securitization facility); 3.25 million common units,
representing limited partnership interests in Sunoco Logistics Partners L.P.; and eligible cash and cash equivalent
balances. At December 31, 2011, the value of assets identified as collateral under the Secured Facility totaled
$2.2 billion. The Secured Facility includes a letter of credit sub-facility, limited to the lesser of the entire
aggregate commitment or the borrowing base, and a $125 million sub-facility for same-day borrowings (as
defined in the Secured Facility). Borrowings outstanding under the Secured Facility bear interest at a base rate
plus an applicable margin that varies based upon the Company’s credit rating (as defined in the Secured Facility).
The Secured Facility contains covenants which require the Company to maintain liquidity of at least $400 million
and collateral equal to at least 110 percent of borrowings outstanding under the Secured Facility. At
December 31, 2011, there were no borrowings under the Secured Facility; however, the Secured Facility was
being used at that date to support letters of credit totaling $64 million and $103 million of floating-rate notes due
in 2034 (with a weighted-average interest rate of .12 percent). The floating-rate notes were repaid in January
2012.
90