CITGO Petroleum sets price talk for $650M secured bond offering

CITGO Petroleum Corp. (CitPet) is circulating price talk for a $650 million offering of secured notes due June 2026 (non-call two) in the 6.50% area, sources said. Books for the deal will close today at 1:30 p.m. ET. Bookrunners are Barclays (bookrunner and dealer) and J.P. Morgan.

Proceeds of the new deal will repay notes due 2022. PDVSA-backed CitPet is rated B-/B3/B. Thus far, the notes have garnered a B+ rating at S&P Global Ratings, and a BB rating at Fitch. The new bond comes with a 101 change-of-control put and an up to 40% equity claw for the first two years.

CitPet was last seen in high yield in June last year when it placed a $1.125 billion offering of 7% secured notes due June 2025, which closed yesterday at 102, yielding 6.327%, according to data compiled by S&P Global Market Intelligence.

CitPet is a U.S. refiner that owns three refining assets in the Gulf Coast region and near Chicago. These assets have one of the highest complexity ratings of all U.S. refiners, according to S&P Global Ratings. The company also has a distribution network with 36 active refined product terminals and supplies fuel to 4,500 branded but independently owned retail gas stations in the East and upper Midwest regions of the U.S.