Delek US Holdings Issues $460M 0.00% Convertible Notes Due 2031

What Happened
Delek US Holdings, Inc. announced it closed a private offering on September 29, 2026 of $460,000,000 aggregate principal amount of 0.00% Convertible Senior Notes due November 1, 2031 (the "Notes") under an indenture with U.S. Bank Trust Company as trustee. The Notes are senior unsecured obligations, fully guaranteed by the subsidiaries that guarantee the company’s term loan and asset-based revolving credit facilities. The company received net proceeds of approximately $449.1 million, used in part to pay for related capped call transactions and for general corporate purposes, including partial repayment of its term loan facility.

Key Details

• Offering closed: September 29, 2026; Purchase Agreement dated September 24, 2026 (initial purchasers exercised option on Sept. 25).
• Principal amount: $460,000,000; net proceeds: ~$449.1 million.
• Interest/maturity: 0.00% coupon (no regular interest); maturity November 1, 2031. Special interest may be payable in limited circumstances.
• Conversion terms: initial conversion rate 11.7219 shares per $1,000 principal (≈ $85.31 per share), ~27.5% premium to $66.91 last sale on Sep 24, 2026; holders can convert freely from Aug 1, 2031 until two scheduled trading days before maturity, and earlier only upon specified triggers.
• Potential share issuance: initially up to 6,874,884 shares based on a maximum conversion rate (subject to anti-dilution adjustments).
• Redemption: Company may not redeem before Nov 6, 2029 (except cleanup redemptions); thereafter optional redemption if stock price ≥130% of conversion price for specified trading-day tests. Cleanup redemption when outstanding principal is <10% of initial issue. Redemption price = 100% principal plus accrued special interest, if any.
• Capped call transactions: entered Sept 24–25, 2026 to reduce dilution and offset certain cash payments on conversion; cost ≈ $34.3 million; initial cap price ≈ $117.09/share (~75% premium).

Why It Matters
This transaction raises liquidity and reduces near-term debt by providing ~$449.1M in net proceeds, part of which will be used to pay down the term loan facility. The Notes are structured to delay dilution (conversion limited until certain stock-price or corporate-event triggers and hedged by capped calls) and carry no regular interest, which reduces immediate cash interest burden. However, the Notes are senior unsecured debt that could convert into equity or be redeemed/repurchased under defined conditions, so investors should watch potential dilution, the company’s stock performance relative to conversion and cap thresholds, and any changes to the company’s credit profile or covenants tied to the guarantees.