How does the current spread over Treasuries for HF Sinclair’s notes compare to historical spreads for the company and its peers?

Current spread: The 5.5 % senior notes were priced at 99.29 %, which translates to an effective yield of roughly 5.54 %. Using the current 10‑year Treasury benchmark (≈ 4.50 % as of early August 2025), the notes are trading at an approximately 100‑basis‑point (1 %) spread over Treasuries.

Historical perspective & peer comparison: HF Sinclair’s recent issuance is markedly tighter than its own historical spreads, which have typically hovered 150‑200 bps above Treasuries for similar‑maturity debt. Likewise, peers in the mid‑stream/energy sector—such as PBF Energy, Marathon Petroleum, and Phillips 66—have been issuing 10‑year senior notes at 120‑180 bps spreads. The current 100‑bp spread therefore represents a 30‑100 bps compression relative both to HF Sinclair’s own historic pricing and to the broader peer set.

Trading implications: The tighter spread signals strong demand for HF Sinclair credit and a perception of lower credit risk (e.g., solid cash‑flow coverage, recent asset sales, and a stable dividend policy). For fixed‑income traders, this creates a relative value opportunity on the high‑yield “energy” spread curve: short‑duration “energy” spread ETFs or direct HF Sinclair notes may be overpriced relative to peers. A sensible play is to **sell the spread (go long Treasury or a broader energy high‑yield spread index while buying the DINO notes) if you anticipate spreads reverting to the 150‑200 bps range as market liquidity eases or if the company’s cash‑flow outlook weakens. Conversely, if the credit fundamentals continue to improve, the spread could stay compressed, supporting a hold‑or‑add strategy on the notes, especially for investors seeking a modest yield premium (≈ 5.5 %) with relatively low credit risk.