CITGO Enters Into a New Senior Secured Credit Agreement and Completes Tender Offers and Redemptions
HOUSTON, Nov. 15, 2005 -- CITGO Petroleum Corporation announced today that it has entered into a new $1.85 billion senior secured credit agreement with a syndicate of lenders led by BNP Paribas and J.P. Morgan Securities Inc., as co-lead arrangers (the "New Credit Agreement"). The New Credit Agreement consists of a five-year $1.15 billion revolving credit facility and a seven-year $700 million term loan facility. Borrowings under the New Credit Agreement are guaranteed by certain of CITGO's subsidiaries and secured by certain accounts receivable and inventory of CITGO and the guarantors, all capital stock in certain of the guarantors, CITGO's Lake Charles, La. refinery and CITGO's equity interest in the entity that holds its Corpus Christi, Texas refinery. The New Credit Agreement replaced CITGO's existing credit agreement, which was due to expire in December.
CITGO also announced that it completed its previously announced cash tender offers for any and all of its outstanding 7-7/8 percent Senior Notes due 2006 (the "7-7/8 percent Notes") and 6 percent Senior Notes due 2011 (the "6 percent Notes" and, together with the 7-7/8 percent Notes, the "Notes") and the related consent solicitations. As of 5 p.m. Eastern Time on Nov. 10, 2005, the expiration date of the tender offers, CITGO had received valid tenders of approximately $135.7 million in aggregate principal amount of the 7-7/8 percent Notes (representing approximately 90.5 percent of the 7-7/8 percent Notes) and $249.6 million in aggregate principal amount of the 6 percent Notes (representing approximately 99.8 percent of the 6 percent Notes). CITGO purchased all Notes validly tendered in the tender offers and financed such purchase with borrowings under the New Credit Agreement. Following completion of the tender offers, approximately $14.3 million in aggregate principal amount of 7-7/8 percent Notes remain outstanding, which are due to mature on May 15, 2006, and approximately $390,000 in 6 percent Notes remain outstanding, which are due to mature on Oct. 15, 2011, unless earlier repurchased or redeemed.
In connection with the consent solicitations, CITGO previously announced that it had received the required consents to amend the indentures under which each of the 7-7/8 percent Notes and the 6 percent Notes were issued (together, the "Indentures") to eliminate substantially all restrictive covenants, certain events of default and certain other related provisions of the Indentures. CITGO and the trustees under the Indentures subsequently entered into supplemental indentures to the Indentures setting forth such amendments, which supplemental indentures became operative upon CITGO's payment for the Notes accepted for purchase pursuant to the tender offers.
J.P. Morgan Securities Inc. acted as the Dealer Manager and Solicitation Agent for the tender offers and consent solicitations and Global Bondholder Services Corporation acted as the Information Agent.
In addition, CITGO confirmed that, on Nov. 14, 2005, it completed its previously announced redemptions of other senior notes and private placement notes (collectively, the "Redemption Notes") in an aggregate principal amount outstanding of approximately $194.0 million. Each series of Redemption Notes was redeemed in accordance with the terms of the relevant indenture or agreement governing such notes at prices based on the principal amount redeemed, together with accrued and unpaid interest to the redemption date, plus an applicable premium or make-whole amount, as the case may be. CITGO used available cash to fund the redemption of the Redemption Notes.
This press release is not an offer to purchase or the solicitation of an offer to sell any securities, including the Notes and the Redemption Notes.
CITGO, based in Houston, is a refiner, transporter and marketer of transportation fuels, lubricants, petrochemicals, refined waxes, asphalt and other industrial products. The company is owned by PDV America, Inc., an indirect wholly owned subsidiary of Petroleos de Venezuela, S.A., the national oil company of the Bolivarian Republic of Venezuela.
For more information visit http://www.citgo.com/ .
This news release contains forward looking statements. Specifically, all statements pertaining to our margins, net income, liquidity, capital expenditures and available capital resources are forward looking statements. These forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the forward looking statements. These risks and uncertainties include developments in Venezuela and third parties' perceptions and reactions to them; changes in the availability and cost of crude oil, feedstocks, blending components and refined products; changes in prices or demand for CITGO products as a result of competitive actions or economic factors; changes in environmental and other regulatory requirements, which may affect operations, operating costs and capital expenditure requirements; costs and uncertainties associated with technological change and implementation; inflation; and continued access to capital markets and commercial bank financing on favorable terms. Readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date of this release. We undertake no obligation to publicly release any revision to these forward looking statements to reflect events or circumstances after the date of this report.
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