Citgo to begin roadshow for $1.5 billion 5½-year secured notes

By Paul Deckelman

New York, Jan. 28 – Citgo Holding, Inc. will begin a roadshow on Thursday for a $1.5 billion offering of senior secured notes (Ca1/B-/B+), high-yield syndicate sources said Wednesday.

The notes will mature in 2020, for a 5½-year tenor.

Pricing is expected in the middle of next week.

The Regulation S and Rule 144A offering, which is being sold with no registration rights, will be brought to market via bookrunning manager Deutsche Bank Securities Inc. Brazil-based BTG Pactual will be the joint lead manager on the offering.

The bonds will have call protection for the first two years after issuance.

Citgo Holding is a newly created affiliate of Citgo Petroleum Corp., a Houston-based refiner, marketer and transporter of gasoline, diesel fuel, jet fuel, lubricants, petrochemicals, and other petroleum-based industrial products. Citgo is owned by PDV America, Inc. – an indirect, wholly owned subsidiary of Petroleos de Venezuela, SA, the state-owned national oil company of Venezuela.

Proceeds from the bond deal, along with the proceeds from a pending $1 billion five-year senior secured first-lien term loan B, will be used to fund a distribution to PDVSA. The term loan, which is also being done via Deutsche Bank Securities, was launched last Thursday with price talk of Libor plus 800 basis points with a 1% Libor floor and an original issue discount of 96 to 97, according to a market source.

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