Jones Day represents CITGO in $1.12bn debt refinancing
CITGO Petroleum Corporation has completed a refinancing transaction to pay off the company’s existing term loan B due 2021 with the private offering of $1.125 billion aggregate principal amount of senior secured notes due 2025, an offering in which the Houston-based company was represented by law firm Jones Day.
Competitively priced at 7 per cent, the transaction was significantly oversubscribed, with participation from a broad and diverse group of investors, the company said.
“Our ability to raise additional funds at attractive pricing, despite the unprecedented economic environment surrounding COVID-19 and global oil supplies, demonstrates the markets’ overall confidence in CITGO,” CITGO’s CEO Carlos Jordá said.
“We believe our core strengths will allow us to continue executing financial strategies that position CITGO for a strong future.”
The company executed the refinancing to enhance liquidity during a time of economic uncertainty. The additional net proceeds will provide flexibility to fund working capital and other general corporate purposes.
Jones Day’s team comprised Houston-based partner Emily Leitch (pictured), Chicago-based partners Edward Winslow and Robert Graves.
CITGO is an affiliate of Venezuela’s state oil company PDVSA, and it owns and operates three large-scale refineries, with a combined crude capacity of approximately 769,000 barrels per day that are located in Corpus Christi, Texas; Lake Charles, Louisiana; and Lemont, Illinois. The company also has ownership/equity interest in 41 active refined product storage and transfer terminals, and has access to over 120 third-party and related party terminals through exchange, terminaling and similar arrangements.
As reported by The Latin American Lawyer, in May a US judge approved the sale of CITGO, allowing Canadian mining company Crystallex to collect $1.4 billion it lost in the takeover of the refiner by the late President Hugo Chávez a decade ago. The decision is seen as a blow to Venezuela, to both the current government of President Nicolás Maduro and opposition leader Juan Guaidó, given the significant revenues the company produces.
