Tesoro issues talk on $900 million two-part notes offering

By Paul A. Harris

St. Louis, Nov. 7 - Tesoro Corp. issued price talk Monday on its $900 million two-part offering of senior notes (Ba1/BB+), according to a market source.

The company talked its seven-year bullet tranche at 6 1/8% to 6 3/8%. Meanwhile a tranche of 10-year notes, which comes with five years of call protection, is talked at 6½% to 6¾%.

Tranche sizes remain to be determined.

The notes are expected to price Tuesday.

Lehman Brothers, Goldman Sachs and JP Morgan are joint bookrunners for the Rule 144A/Regulation S notes.

Proceeds and cash on hand will be used to fund the tender for the company's 9 5/8% senior subordinated notes due 2008, its 9 5/8% senior subordinated notes due 2012 and its 8% senior secured notes due 2008.

Tesoro is a San Antonio-based oil refiner.

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