UPDATE 1-Venezuela cancels Citgo auction, seeks to raise $2.5 bln -source
(Recasts with source saying Citgo auction has been canceled)
CARACAS/HOUSTON Jan 20 (Reuters) - Venezuela has taken U.S. refining unit Citgo Petroleum Corp off the auction block and it will now seek to raise $2.5 billion in the debt market to provide funding for the cash-strapped country, a source familiar with the matter said on Tuesday.
The auction was canceled in the last 48 hours on the advice of Citgo's lawyers after they told Citgo that if the company wished to raise funds in the debt market, it should remove itself from the auction block, the source added.
Deutsche Bank has announced plans for a $1.5 billion bond to be issued by Citgo Holdings, with details expected to emerge next week, reported Thomson Reuters IFR earlier on Tuesday, without citing sources.
The German bank has also scheduled bank meetings for Thursday in New York to launch a $1 billion senior secured first lien five-year term loan B, according to IFR.
Citgo and Venezuela's state-run PDVSA declined to comment.
The Wall Street Journal first reported that the Citgo auction had been canceled.
Citgo's assets, including a refining network with capacity to process up to 750,000 barrels per day (bpd) of crude, have been up sale since 2014. Several bidding rounds have been held by banking firm Lazard Ltd, hired by PDVSA to manage the operation.
Although Venezuela's finance minister in October denied the pending sale, Lazard had continued with the process in recent months, according to sources close to the deal. Continuación...