Diesel surges past $5 as Russian export ban extends and US ban looms

## Takeaways - **Capital raise structure:** Delek US (NYSE: DK) intends to offer $400.0 million in convertible senior notes due November 1, 2031, with a 13-day, $60.0 million over-allotment option for initial purchasers (potential total: $460.0 million), sold via Rule 144A private placement to qualified institutional buyers. - **Use of proceeds — deleveraging signal:** A portion funds capped call transactions (dilution offset); the remainder is earmarked for general corporate purposes, explicitly including **partial repayment of the Term Loan Credit Facility** (principal, accrued interest, fees/expenses) — a balance-sheet optimization move rather than growth capex, indicating no signaled change to refining/logistics investment plans. - **No operational guidance changes:** The release contains no updates to throughput, utilization, capture rates, margins, renewable diesel/SAF economics, or RIN/LCFS exposure — this is purely a financing/liability-management transaction. - **Refining footprint reference point:** Document reaffirms combined nameplate crude throughput capacity of **302,000 bpd** across Tyler and Big Spring (TX), El Dorado (AR), and Krotz Springs (LA) refineries — unchanged from prior disclosures, no capacity additions or idling mentioned. - **Logistics ownership stake:** Delek and subsidiaries hold ~58.0% of Delek Logistics Partners, LP (NYSE: DKL) as of August 14, 2026, unchanged, with no new logistics asset drops or midstream capex commitments tied to this offering. - **Redemption/conversion mechanics:** Notes are non-callable until November 6, 2029 (absent a cleanup redemption below 10% outstanding), and conversion terms (rate, interest) remain unset pending pricing — standard convertible structure with no embedded commodity-linked or fuels-market triggers. ## Market Signal This is a balance-sheet management transaction — refinancing near-term term-loan debt into longer-dated convertible paper — with no indication of capacity changes, margin guidance, or renewable fuels strategy shifts, suggesting Delek's operational refining/logistics outlook remains steady while management prioritizes financial flexibility ahead of potential capex or macro refining-margin volatility.

## Key Takeaways - **Capital raise details**: Delek US priced $400.0 million of 0.00% convertible senior notes due November 1, 2031 (with a 13-day, $60.0 million upsize option), priced September 24, 2026, closing September 29, 2026. Notes carry zero coupon and no principal accretion. - **Use of proceeds — deleveraging signal**: A portion funds capped call transactions (anti-dilution hedge); the remainder goes to "general corporate purposes," explicitly including **partial repayment of the Term Loan Credit Facility** (principal, accrued interest, fees). This is a liability-management move, not new capex or growth funding. - **Conversion economics**: Initial conversion price ~$85.31/share (11.7219 shares per $1,000 note), a 27.5% premium over the September 24, 2026 close of $66.91. Capped call cap price set at ~$117.09/share (75% premium), limiting dilution up to that level. - **No operational disclosures**: The release contains **no throughput, utilization, capture rate, crack spread, renewable diesel/SAF, or RIN/LCFS data** — this is purely a financing/capital-markets exhibit, not an operating update or guidance revision. - **Refining footprint reminder**: Company reiterates combined nameplate crude throughput capacity of 302,000 bpd across Tyler, Big Spring, El Dorado, and Krotz Springs, and ~58.0% ownership (incl. GP interest) in Delek Logistics Partners (DKL) as of August 14, 2026 — unchanged from prior disclosures. ## Market Signal This is a balance-sheet/financial-flexibility transaction — using cheap convertible debt to term out and reduce term-loan borrowings — rather than any indication of refining margin strength, throughput changes, or renewable fuels strategy, so it should be read as a funding/liquidity event with no direct read-through to near-term refined product supply or crack spreads.