Citgo receives consent to amend 6%, 7 7/8% notes

New York, Oct. 27 - Citgo Petroleum Corp. said it has received the necessary consents to amend its $250 million 6% senior notes due 2011 and $150 million 7 7/8% senior notes due 2006 as part of its tender offer for the securities.

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.

Citgo plans to enter into a supplemental indenture promptly, but it will only become effective when it buys the notes.

Purchase is subject to various conditions.

Citgo announced the tender offer on Oct. 13 and it ends at midnight ET on Nov. 9.

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% U.S. 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 basis points over the yield on the 2% U.S. Treasury note due May 15, 2006.

The prices include a consent payment of $25 per $1,000.

Pricing will be set two business days before expiration.

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, certain events of default and certain other related provisions in the indentures.

Citgo needs the consent of the holders of a majority of the notes.

Holders cannot consent without tendering and vice versa.

The offer is also subject to completion of a new senior secured credit agreement with a syndicate of lenders led by BNP Paribas and JPMorgan Chase Bank, NA.

Citgo, a Houston-based oil refiner, 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 also 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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