Citgo readies launch of $1 billion term loan B for Thursday morning

By Sara Rosenberg

New York, Jan. 20 – Citgo Holding Inc. is scheduled to hold a bank meeting at 10 a.m. ET in New York on Thursday to launch a $1 billion senior secured first-lien term loan B, according to a market source.

Deutsche Bank Securities Inc. is the bookrunner on the deal.

The loan is non-callable for one year, then at 102 in year two and 101 in year three, the source said.

Amortization on the term loan is 1% per annum.

The loan has a maximum debt to capitalization covenant of 75%, a debt service reserve of six months of interest and principal on Citgo Holding debt and an excess cash flow sweep initially set at 75%, the source added.

Proceeds will be used with an expected $1.5 billion pari passu high-yield offering to fund a distribution to Citgo Holding’s ultimate parent.

Citgo is a Houston-based refiner, marketer and transporter of gasoline, diesel fuel, jet fuel, lubricants, petrochemicals, and other petroleum-based industrial products.

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