PBF Energy Subsidiary Prices $500M Notes Offering

PBF Energy's financial subsidiaries have priced a $500 million zero-coupon exchangeable notes offering due 2032 to refinance existing debt and limit potential equity dilution. The transaction arrives as PBF Energy Inc. (NYSE: PBF) shares trade at $74.57, down 0.20%, according to Finnhub market data as of September 16, 2026.

PBF Holding Company LLC and PBF Finance Corporation structured the private offering with a 0% coupon rate, locking in zero interest expense on the primary principal. Initial purchasers in the deal also received a 13-day option to purchase up to an additional $50 million in aggregate principal amount of the notes.

Conversion Terms and Premium Structure

The notes carry an initial exchange rate of 10.3306 shares of common stock per $1,000 principal amount. This establishes an initial exchange price of approximately $96.80 per share.

The conversion price represents a 37.5% premium over the $70.40 closing price of PBF Energy common stock recorded on September 14, 2026. Zero-coupon exchangeable notes allow issuers to raise capital at low or zero interest rates by offering investors equity conversion rights, trading lower immediate financing costs for potential future equity issuance.

Refinancing and Capped Call Mechanics

Net proceeds from the offering are estimated at approximately $485 million. The subsidiaries plan to allocate these funds toward specific capital management objectives, including funding capped call transactions designed to minimize equity dilution, and repaying or redeeming all outstanding 7.875% Senior Unsecured Notes due 2030.

The accompanying capped call transactions feature an initial cap price of $123.20 per share, establishing a 75.0% premium over the September 14, 2026 stock price. Companies frequently purchase capped calls alongside exchangeable debt to offset potential dilution when noteholders exercise their conversion rights, capping the issuer's equity exposure at the specified threshold.

Balance Sheet Restructuring

The private offering enables PBF Energy to retire higher-yielding senior debt maturing in 2030. By substituting older coupon-bearing obligations with zero-coupon exchangeable debt due in 2032, the refining company reduces near-term interest burdens while managing its long-term capital structure.