UPDATE 1-Citgo amends US$2.5bn deal to attract investors-source

viernes 6 de febrero de 2015 13:25 GYT

(Adds details of pricing and restructuring)

By Davide Scigliuzzo

NEW YORK, Feb 6 (IFR) - Venezuela's U.S. oil refiner Citgo Holding restructured and raised the yield on a proposed US$2.5bn financing package following lackluster investor demand, a source familiar with the deal said on Friday.

The company, which plans to use proceeds to pay a dividend to Venezuela's state-owned oil company PDVSA, also agreed to pledge 100% of its operating company as collateral for the sale, the source said.

Concerns over the outlook for the battered US energy sector and default fears surrounding cash-strapped Venezuela have already forced Citgo to sweeten terms on the deal twice this week.

In the latest revision, the company raised the yield on a US$1.5bn bond offering to 12% area, removed a call option after the first two years, and cut the note's maturity by six months to five years.

Original price talk on the note was 11.75%, which was wide to initial price indications - or whispers - of high 10% to 11%.

The structure and pricing of the US$1bn loan part of the package was also altered to make the deal more attractive to investors.

The maturity on the senior secured term loan has been reduced to 3.25 years from the originally targeted five years, while pricing is now seen at a spread of 850bp over Libor.   Continuación...