Sunoco prices $1.5 billion preferred equity offering to fund Parkland deal

Sunoco LP (NYSE: SUN) announced the pricing of a private offering of 1.5 million Series A preferred units at $1,000 per unit, generating gross proceeds of $1.5 billion before fees and expenses. The offering was increased from an initial size of 1 million units and is expected to settle on September 18, 2025.

The company plans to use the net proceeds, along with funds from previously announced senior note offerings totaling $1.9 billion, to finance its acquisition of Parkland Corporation and related transaction costs. Any remaining proceeds will be used for general corporate purposes or to temporarily reduce borrowings under Sunoco's revolving credit facility.

The Series A preferred units carry a distribution rate of 7.875% per annum through September 18, 2030, paid semi-annually on March 18 and September 18 each year beginning March 18, 2026. After the first reset date of September 18, 2030, the rate will adjust to the five-year U.S. Treasury rate plus a spread of 4.230% per annum.

If the Parkland acquisition is not completed by May 5, 2026, or if the arrangement agreement is terminated, the preferred units will be subject to mandatory redemption at $1,000 per unit plus accumulated unpaid distributions. The units are redeemable at Sunoco's option on or after the first reset date and are not convertible into other securities.

The offering is not contingent on completing the Parkland acquisition or the senior note offerings. The preferred units are being sold to qualified institutional buyers under Rule 144A and to non-U.S. persons under Regulation S, as the offering has not been registered under the Securities Act of 1933.

Sunoco operates an energy infrastructure and fuel distribution network across over 40 U.S. states, Puerto Rico, Europe, and Mexico, with approximately 14,000 miles of pipeline and over 100 terminals.

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