Suburban Propane Partners, L.P. will issue $350 million of 6.5% senior notes due December 15 2035 in a private placement to qualified institutional buyers in the United States and to non‑U.S. persons abroad under Rule 144A and Regulation S. The notes will be issued at par, bear interest semi‑annually, and the first coupon will be paid on June 15 2026.
The notes are co‑issued by Suburban Energy Finance Corp., a wholly‑owned subsidiary, and carry redemption provisions that allow the company to redeem up to 35 % of the issue before December 15 2028 at 106.5 % of principal. The remaining balance may be redeemed after that date at a make‑whole premium, providing Suburban with flexibility to manage its debt profile as market conditions evolve.
The proceeds, combined with borrowings under the company’s revolving credit facility, will retire all outstanding $350 million of its 5.875% senior notes due 2027. While the new coupon rate is higher than the old rate, the extended maturity to 2035 shifts the company’s debt from a short‑term, higher‑rate instrument to a longer‑term, lower‑rate vehicle, improving the debt‑to‑equity ratio and freeing cash that can be deployed toward renewable‑energy projects and core propane operations. The refinancing also reduces the company’s overall interest expense exposure to short‑term rate swings.
Suburban’s Q4 2025 earnings report showed a revenue miss of $211.4 million versus the consensus estimate of $227 million, while earnings per share of –$0.53 aligned with expectations. The revenue shortfall was driven by weaker demand in the fuel‑oil segment and a modest decline in propane volumes, offset by a modest uptick in renewable natural gas sales. The company’s adjusted EBITDA rose 19.1 % year‑over‑year to $175 million, supported by colder weather and acquisitions that expanded its distribution footprint. Management attributed the revenue miss to a combination of seasonal demand softness and higher input costs, while noting that margin compression in legacy fuel segments was partially offset by higher pricing in the renewable‑energy segment.
Management emphasized that the debt issuance is part of a broader strategy to balance its capital structure while accelerating investment in renewable‑energy initiatives. CEO Mike Stivala highlighted the company’s commitment to expanding renewable propane and renewable natural gas projects, noting that the new notes provide the financial flexibility needed to fund these long‑term growth opportunities without compromising the core propane distribution business. The refinancing also positions Suburban to take advantage of favorable market conditions for future capital expenditures and potential dividend support.
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