Citgo Said to Offer 67% Premium on Loan Funding PDVSA Dividend
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Citgo Holding Inc. is offering interest on a $1 billion loan that’s 67 percent above market rates, showing how expensive it’s become for riskier energy companies to borrow after oil prices tumbled.
The parent of Houston-based refiner Citgo Petroleum Corp. will pay 8 percentage points more than lending benchmarks for the loan that will help fund a dividend to state-owned Petroleos de Venezuela SA, according to a person with knowledge of the deal, who asked not to be identified because the information is private. The spread on new similarly rated loans sold to institutional investors was an average 4.79 percentage points on Jan. 15, according to Standard & Poor’s Capital IQ Leveraged Commentary & Data.