Citgo Said to Plan $2.5 Billion Debt for Venezuela Dividend

Citgo Petroleum Corp. is planning to raise $2.5 billion that it will use to shore up the finances of its state-owned parent company, Petroleos de Venezuela SA, according to a person with knowledge of the matter.

The U.S. oil refining and marketing unit of PDVSA is seeking to sell $1.5 billion of bonds and obtain a $1 billion loan, according to the person, who asked not to be identified because the information is private. While Citgo’s debt ratings were cut to six levels below investment grade by Moody’s Investors Service last week on concern Venezuela will default, it’s still three steps higher than the government’s rating.