Delek prices $400 million zero-coupon convertible offering

Delek US ($DK) priced $400 million of convertible senior notes due in 2031 with a zero coupon. Initial purchasers can buy up to another $60 million. The initial conversion price is approximately $85.31 per share, representing a 27.5% premium to the share-price reference used for the transaction. Settlement is expected on September 29, subject to customary conditions.

The company plans to use proceeds to repay term-loan borrowings and for general corporate purposes. It also arranged capped-call transactions intended to reduce potential dilution from conversion within specified limits. A zero coupon removes regular interest payments on these notes, but does not make the financing costless or eliminate conversion risk. Pricing establishes terms; it does not mean the offering has already settled.

Sources:

• Delek US — convertible offering pricing, Business Wire release