Citgo sets pricing in tender for 6%, 7 7/8% notes

New York, Nov. 8 - Citgo Petroleum Corp. said it fixed pricing in its tender for its $250 million 6% senior notes due 2011 and $150 million 7 7/8% senior notes due 2006.

The company will pay $1,053.96 per $1,000 principal amount for the 6% notes and $1,015.15 per $1,000 principal amount for the 7 7/8% notes.

Pricing was set at 2 p.m. ET on Nov. 8. Both prices include the consent payment that will only be paid to holders who tendered by the consent deadline of 5 p.m. ET on Oct. 26.

At its previous announcement on Nov. 7, the Houston-based oil refiner extended its tender to 5 p.m. ET on Nov. 10 from midnight ET on Nov. 9, saying the extension was to coincide with the anticipated closing date of a new senior secured credit agreement it expects to enter with a syndicate of lenders led by BNP Paribas and JPMorgan Chase Bank, NA.

As previously reported, by the consent deadline of 5 p.m. ET on Oct. 26, holders had tendered with consents 99.6% of the 6% notes and 90.4% of its 7 7/8% notes, the required consents to amend the notes' indenture.

Citgo, which announced the offer on Oct. 13, plans to enter into a supplemental indenture promptly, but it will only become effective when it buys the notes.

For each $1,000 principal amount of 6% notes, the company is offering a price based on 50 basis points over the yield on the 3 1/8% Treasury note due Oct. 15, 2008.

For each $1,000 principal amount of 7 7/8% notes, Citgo is offering a price based on 50 bps over the yield on the 2% Treasury note due May 15, 2006.

The prices include a consent payment of $25.00 per $1,000.

Citgo will also pay accrued interest up to but excluding the payment date.

The consent solicitation is to amend the notes to eliminate substantially all the restrictive covenants, events of default and other related provisions in the indentures.

Citgo plans to redeem any of the 6% notes that remain outstanding after the tender.

J.P. Morgan Securities Inc. is the dealer manager and solicitation agent (call collect 212 834-3424 or 866 834-4666). Global Bondholder Services Corp. is the information agent (call collect 212 430-3774 or 866 470-3700).

Citgo previously said it plans to redeem its other senior notes and notes outstanding under its shelf agreement with a total principal amount of $194.0 million. Redemption will be in accordance with the terms.

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