SunCoke Energy Partners to assume, redeem $135 million SunCoke notes

New York, Jan. 13 – SunCoke Energy Partners, LP will assume $135 million of SunCoke Energy, Inc.’s senior notes and is expected to call them as part of a transaction involving a 75% interest in a cokemaking facility at Granite City, Ill.

In addition to assuming the notes, SunCoke Energy Partners will also pay $5.6 million of accrued interest.

The redemption will result in the payment of a call premium of $7.7 million.

SunCoke Energy, Inc. had $240 million of 7 5/8% notes due 2019 outstanding as of Sept. 30, according to the company’s most recent 10-Q filing with the Securities and Exchange Commission.

In the agreement announced Tuesday, SunCoke Energy, Inc. will drop down the 75% interest in the Granite City facility to SunCoke Energy Partners.

The transaction value is $245 million, according to a news release.

Included in the total is $50.6 million of limited partner interest in SunCoke Energy Partners and $1 million of general partner interest in addition to the assumption of debt.

SunCoke Energy, Inc. is the sponsor of SunCoke Energy Partners, the general partner with a 2% general partner interest, and the largest unitholder with a 54% limited partner interest.

“In addition to de-levering SXC’s [SunCoke Energy, Inc.] balance sheet, we believe this transaction will benefit SXC investors by increasing our ownership interest in SXCP [SunCoke Energy Partners] at an attractive valuation and the associated opportunity to receive higher future cash distributions from SXCP, including incentive distribution rights payments,” said Fritz Henderson, chairman and chief executive officer of SunCoke Energy, Inc., in a news release.

“Today’s transaction aligns with our long-term vision to transform SXC to a pure-play C-Corp general partner.

“In addition to de-levering SXC’s balance sheet, we believe this transaction will benefit SXC investors by increasing our ownership interest in SXCP at an attractive valuation and the associated opportunity to receive higher future cash distributions from SXCP, including incentive distribution rights payments.”

Also Tuesday, SunCoke Energy Partners announced a $200 million add-on offering of 7 3/8% senior notes due 2020.

Proceeds will be used to repay debt assumed from SunCoke Energy, Inc. and to prefund an environmental facility.

SunCoke Energy, Inc. is a Lisle, Ill. Coke producer.

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