Valero Energy Corporation Announces the Pricing Terms of its Cash Tender Offers

SAN ANTONIO--(BUSINESS WIRE)--Valero Energy Corporation (NYSE: VLO, “Valero”) announced today the pricing terms of its previously announced cash tender offers (the “Tender Offers”) to purchase its outstanding 3.650% Senior Notes due 2025 (the “3.650% 2025 Notes”), its outstanding 2.850% Senior Notes due 2025 (the “2.850% 2025 Notes”), its outstanding 3.400% Senior Notes due 2026 (the “3.400% 2026 Notes”), the outstanding 4.375% Senior Notes due 2026 issued by Valero Energy Partners LP and guaranteed by Valero (the “4.375% 2026 Notes”), its outstanding 4.000% Senior Notes due 2029 (the “4.000% 2029 Notes”), its outstanding 4.350% Senior Notes due 2028 (the “4.350% 2028 Notes”), the outstanding 4.500% Senior Notes due 2028 issued by Valero Energy Partners LP and guaranteed by Valero (the “4.500% 2028 Notes”), its outstanding 2.150% Senior Notes due 2027 (the “2.150% 2027 Notes”), its outstanding 6.625% Senior Notes due 2037 (the “6.625% 2037 Notes”), its outstanding 4.900% Senior Notes due 2045 (the “4.900% 2045 Notes”) and its outstanding 7.500% Senior Notes due 2032 (the “7.500% 2032 Notes” and, collectively with the 3.650% 2025 Notes, the 2.850% 2025 Notes, the 3.400% 2026 Notes, the 4.375% 2026 Notes, the 4.000% 2029 Notes, the 4.350% 2028 Notes, the 4.500% 2028 Notes, the 2.150% 2027 Notes, the 6.625% 2037 Notes and the 4.900% 2045 Notes, the “Notes”) for up to an increased maximum aggregate principal amount of $1,250,000,000 (such increased maximum aggregate principal amount, the “Maximum Aggregate Principal Amount”). The terms and conditions of the Tender Offers are described in the Offer to Purchase, dated August 26, 2022 (the “Offer to Purchase”).

The following table lists the Tender Offers that had been validly tendered and not validly withdrawn at or prior to 5:00 p.m., New York City time, on September 9, 2022 (the “Early Tender Date”), as reported by D.F. King & Co., Inc., the tender and information agent. The applicable Reference Yield, Repurchase Yield, Early Tender Payment and Total Consideration (each as defined more fully in the Offer to Purchase) with respect to the Notes accepted for purchase are detailed in the table below.

Title of Security	CUSIP / ISIN	Initial Principal Amount Outstanding	Acceptance Priority Level	U.S. Treasury Reference Security	Reference Yield	Fixed Spread	Repurchase Yield	Early Tender Payment (1)(2)	Total Consideration (1)(2)
3.650% Senior Notes due 2025	91913YAS9 / US91913YAS90	$252,075,000	1	3.125% UST due 8/15/2025	3.562%	+55 bps	4.112%	$30	$989.10
2.850% Senior Notes due 2025	91913YAY6 / US91913YAY68	$542,869,000	2	3.125% UST due 8/15/2025	3.562%	+55 bps	4.112%	$30	$969.28
3.400% Senior Notes due 2026	91913YAU4 / US91913YAU47	$597,411,000	3	3.125% UST due 8/31/2027	3.392%	+70 bps	4.092%	$30	$974.67
4.375% Senior Notes due 2026^(3)	91914JAA0 / US91914JAA07	$207,672,000	4	3.125% UST due 8/31/2027	3.392%	+90 bps	4.292%	$30	$1,003.02
4.000% Senior Notes due 2029	91913YAW0 / US91913YAW03	$1,000,000,000	5	2.750% UST due 8/15/2032	3.285%	+140 bps	4.685%	$30	$961.72
4.350% Senior Notes due 2028	91913YAV2 / US91913YAV20	$750,000,000	6	3.125% UST due 8/31/2027	3.392%	+110 bps	4.492%	$30	$992.85

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(1)	Per $1,000 principal amount.
(2)	The Total Consideration for each series of Notes validly tendered prior to or at the Early Tender Date and accepted for purchase is calculated using the applicable fixed spread shown in the table above and is inclusive of the Early Tender Payment for such series of Notes.
(3)	Issued by Valero Energy Partners LP and guaranteed by Valero.

Because the aggregate principal amount of Notes validly tendered and not validly withdrawn at or prior to the Early Tender Date has an aggregate principal amount that exceeds the Maximum Aggregate Principal Amount, Valero does not expect to accept for purchase all Notes that have been validly tendered and not validly withdrawn at or prior to the Early Tender Date. Rather, subject to the Maximum Aggregate Principal Amount, the Series Tender Caps (as defined in the Offer to Purchase) applicable to the 6.625% 2037 Notes and 7.500% 2032 Notes, respectively, and the acceptance priority levels set forth in the table above, in each case as further described in the Offer to Purchase, Valero will accept for purchase the 3.650% 2025 Notes, the 2.850% 2025 Notes, the 3.400% 2026 Notes, the 4.375% 2026 Notes, the 4.000% 2029 Notes and the 4.350% 2028 Notes validly tendered and not validly withdrawn at or prior to the Early Tender Date and does not expect to accept for purchase any 4.500% 2028 Notes, 2.150% 2027 Notes, 6.625% 2037 Notes, 4.900% 2045 Notes and 7.500% 2032 Notes. Valero expects to accept for purchase the 4.350% 2028 Notes validly tendered and not validly withdrawn at or prior to the Early Tender Date with a proration factor of approximately 31.7%. As a result, a holder who validly tenders and does not validly withdraw Notes pursuant to the Tender Offers may have all or a portion of its Notes returned to it.

On the Early Settlement Date (as defined below), Valero will pay the Total Consideration (as shown in the table above) for each $1,000 principal amount of each of the 3.650% 2025 Notes, the 2.850% 2025 Notes, the 3.400% 2026 Notes, the 4.375% 2026 Notes, the 4.000% 2029 Notes and the 4.350% 2028 Notes validly tendered and not validly withdrawn at or prior to the Early Tender Date and accepted for purchase. The Total Consideration was calculated in the manner described in the Offer to Purchase by reference to the applicable fixed spread specified in the table above plus the applicable yield to maturity based on the bid-side price of the applicable U.S. Treasury Reference Security specified in the table above at 10:00 a.m., New York City time, on September 12, 2022. The Total Consideration also includes the Early Tender Payment (as shown in the table above) for each $1,000 principal amount of each of the 3.650% 2025 Notes, the 2.850% 2025 Notes, the 3.400% 2026 Notes, the 4.375% 2026 Notes, the 4.000% 2029 Notes and the 4.350% 2028 Notes validly tendered and not validly withdrawn at or prior to the Early Tender Date and accepted for purchase. Payments for the 3.650% 2025 Notes, the 2.850% 2025 Notes, the 3.400% 2026 Notes, the 4.375% 2026 Notes, the 4.000% 2029 Notes and the 4.350% 2028 Notes accepted for purchase will include accrued and unpaid interest from the last interest payment date applicable to the relevant series of Notes up to, but excluding, the settlement date for Notes that are validly tendered and not validly withdrawn at or prior to the Early Tender Date and accepted for purchase (the “Early Settlement Date”). It is anticipated that the Early Settlement Date will be September 13, 2022, the second business day after the Early Tender Date.

The Tender Offers will expire at midnight, New York City time, at the end of September 23, 2022, unless extended or earlier terminated. Because the Tender Offers have been fully subscribed as of the Early Tender Date, holders who tender Notes after the Early Tender Date will not have any of their Notes accepted for purchase, unless Valero elects to increase or eliminate the Maximum Aggregate Principal Amount. Any Notes tendered after the Early Tender Date, together with any Notes tendered at or prior to the Early Tender Date but not accepted for purchase by Valero, will be returned to the holders thereof as described in the Offer to Purchase, unless Valero elects to increase or eliminate the Maximum Aggregate Principal Amount.

The withdrawal deadline for the Tender Offers was 5:00 p.m., New York City time, on September 9, 2022 and has not been extended. Accordingly, previously tendered Notes and Notes tendered after such withdrawal deadline may not be withdrawn, subject to applicable law.

Valero’s obligation to accept for payment and to pay for the Notes validly tendered and not validly withdrawn in the Tender Offers is subject to the satisfaction or waiver of a number of conditions described in the Offer to Purchase. The Tender Offers may be terminated or withdrawn in whole or terminated or withdrawn with respect to any series of the Notes, subject to applicable law. Valero reserves the right, subject to applicable law, to (1) waive any and all conditions to any of the Tender Offers, (2) extend or terminate any of the Tender Offers, (3) increase, decrease or eliminate the Maximum Aggregate Principal Amount and/or any Series Tender Cap with respect to a particular series or (4) otherwise amend any of the Tender Offers in any respect.

Valero has retained BofA Securities, Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Wells Fargo Securities, LLC as dealer managers (the “Dealer Managers”) for the Tender Offers. Valero has retained D.F. King & Co., Inc. as the tender and information agent for the Tender Offers. For additional information regarding the terms of the Tender Offers, please contact: BofA Securities, Inc. at [phone] (toll free) or [phone] (collect); Citigroup Global Markets Inc. at [phone] (collect) or [phone] (toll free); J.P. Morgan Securities LLC at [phone] (toll free) or [phone] (collect); or Wells Fargo Securities, LLC at [phone] (toll free) or [phone] (collect). Requests for documents and questions regarding the tendering of securities may be directed to D.F. King & Co., Inc. by telephone at [phone] (for banks and brokers only) or [phone] (for all others, toll-free), by email at [e-mail] or to the Dealer Managers at their respective telephone numbers.

This announcement is for information purposes only and does not constitute a solicitation of an offer to sell or an offer to purchase any securities. The Tender Offers are being made only pursuant to the Offer to Purchase and only in such jurisdictions as is permitted under applicable law. None of Valero, the tender and information agent, the Dealer Managers or the trustees with respect to the Notes, nor any of their affiliates, makes any recommendation as to whether holders should tender or refrain from tendering all or any portion of their Notes in response to the Tender Offers.

Safe-Harbor Statement

Statements contained in this press release that state Valero’s or its management’s expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words “anticipate,” “believe,” “expect,” “plan,” “intend,” “scheduled,” “estimate,” “project,” “projection,” “predict,” “budget,” “forecast,” “goal,” “guidance,” “target,” “could,” “would,” “should,” “may,” “strive,” “seek,” “potential,” “opportunity,” “aimed,” “considering,” “continue,” and other similar expressions identify forward-looking statements. Forward-looking statements in this press release include those relating to the expiration date and settlement date for the Tender Offers. It is important to note that actual results could differ materially from those projected in such forward-looking statements based on numerous factors, including those outside of Valero’s control, such as legislative or political changes or developments, market dynamics, cyberattacks, weather events, and other matters affecting our operations or the demand for our products. These factors also include, but are not limited to, the uncertainties that remain with respect to the Russia-Ukraine conflict, the impact of inflation on margins and costs, the COVID-19 pandemic, variants of the COVID-19 virus, governmental and societal responses thereto, and the adverse effects the foregoing may have on our business or economic conditions generally. For more information concerning these and other factors that could cause actual results to differ from those expressed or forecasted, see Valero’s annual report on Form 10-K, the “Risk Factors” section included in the Offer to Purchase, quarterly reports on Form 10-Q, and other reports filed with the Securities and Exchange Commission.

About Valero

Valero Energy Corporation, through its subsidiaries (collectively, “Valero”), is an international manufacturer and marketer of petroleum-based and low-carbon liquid transportation fuels and petrochemical products, and sells its products primarily in the United States (“U.S.”), Canada, the United Kingdom (“U.K.”), Ireland and Latin America. Valero owns 15 petroleum refineries located in the U.S., Canada and the U.K. with a combined throughput capacity of approximately 3.2 million barrels per day. Valero is a joint venture member in Diamond Green Diesel Holdings LLC, which owns a renewable diesel plant in Norco, Louisiana with a production capacity of 700 million gallons per year, and Valero owns 12 ethanol plants located in the Mid-Continent region of the U.S. with a combined production capacity of approximately 1.6 billion gallons per year. Valero manages its operations through its Refining, Renewable Diesel, and Ethanol segments. Please visit www.investorvalero.com for more information.