Premcor Refining issues price talk on $400 million two-tranche senior note offering

By Paul A. Harris

St. Louis, Jan. 27 - Premcor Refining Group Inc. issued price talk Monday on both tranches of a $400 million Rule 144A offering of senior notes (Ba3/BB-/BB-), according to a syndicate source. The notes are expected to price Tuesday.

The new notes due 2013, which are non-callable for five years, are being talked at 9¼%-9½%. The notes due 2010, which are non-callable for three years, are being talked 25 basis point tighter than the 10-year notes.

Credit Suisse First Boston is the bookrunner. Morgan Stanley, Deutsche Bank Securities Inc., Goldman, Sachs & Co. and Fleet Securities are co-managers.

The deal is also coming with a $650 million credit facility and a $251 million stock offering.

Proceeds will be used to finance the purchase of a refinery in Memphis, Tenn. from Williams Cos., Inc. for $415 million, to retire existing notes and for general corporate purposes.

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