Citgo offering $1.5 bln in bonds, 10-11 pct yield -IFR

miércoles 28 de enero de 2015 13:47 GYT

HOUSTON Jan 28 (Reuters) - Citgo Petroleum, a unit of Venezuela's refining company in the United States, is offering $1.5 billion in bonds maturing in 2020 with a 10 percent to 11 percent yield, according to sources consulted by Thomson Reuters IFR.

The bond is initially offering a pick-up of up to 100 basis points over a $1 billion, 5-year term loan that is being launched jointly and marketed with price talk of about 800 basis points over Libor, for a yield of around 10 percent, the sources said.

Citgo and Deutsche Bank, which is managing the transaction, last week announced in New York some details of the $2.5 billion credit package that will raise money for Citgo's parent company, state-run PDVSA, amid falling crude oil prices and difficulties accessing foreign credit.

The loan will be secured by $750 million in Citgo's midstream assets, including terminals and pipelines, and a 49 percent pledge on its equity.

Citgo is expected to have a roadshow for the bond portion of the deal on Thursday and price the transaction next week.

Earlier this month Citgo confirmed that its assets are no longer for sale after PDVSA canceled the offering. Officials instead announced details of the plan to raise $2.5 billion through a mix of bonds and a loan.

Venezuelan President Nicolas Maduro said on Tuesday the country is seeking financing to counter a dramatic fall in oil prices - Venezuelan petroleum basket is below $40 per barrel - that have hurt the cash-strapped OPEC country.

The OPEC nation's economic crisis has hit Maduro's popularity and ratcheted up pressure on the government to find fresh funds to curb a growing fiscal deficit. (Reporting by Davide Scigliuzzo and Marianna Parraga; Editing by Alan Crosby)