Moody's rates Citgo debt Ba2, Ba1

Moody's Investors Service affirmed Citgo Petroleum Corp.'s Ba2 corporate family rating and assigned a Ba2 rating (LGD3, 41%) to its $300 million term loan B facility due 2015 and its $1.5 billion of senior secured notes, downgraded the rating on its pollution control bonds to Ba2 (LGD3, 41%) and upgraded the probability-of-default rating to Ba2 from Ba3.

The agency also assigned a Ba1 rating (LGD3, 39%) to the company's proposed $700 million revolving credit facility due 2013.

The outlook is stable.

Proceeds from the notes and term loan B will be used to repay $1.7 billion of outstanding term loans A and B and its floating-rate industrial revenue bonds. The new $700 million revolver will remain undrawn as a source of liquidity.

The affirmation reflects prospects for modestly improved financial results in 2010, despite a continuing difficult refining environment, the near-term expected settlement of the note receivable from its parent, Petroleos de Venezuela, and the improved liquidity and financial flexibility that Citgo will derive from the financings, which also provide a strong collateral package to creditors, according to the agency.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.