New York, March 15, 2018 -- Moody's Investors Service upgraded CITGO Petroleum Corporation (Citgo
Petroleum)'s Corporate Family Rating to B3 from Caa1; its Probability
of Default rating to B3-PD from Caa1-PD; and its senior
secured ratings on term loans and global notes and IRB's to B3 (LGD3)
from Caa1 (LGD4). The rating on Citgo Petroleum's senior secured
revolving credit facility was upgraded to B2 (LGD3) from B3 (LGD4).
Furthermore, Moody's upgraded CITGO Holding, Inc. (Citgo
Holding)'s Corporate Family Rating to Caa1 from Caa2; and its senior
secured ratings on global notes Caa1 (LGD4) from Caa2 (LGD4). In
addition, Moody's withdrawn Citgo Holding's senior secured term
loan B due 2018 as is no longer outstanding.
The ratings outlook for Citgo Petroleum and Holding was changed to stable
from negative.
Ratings upgraded as follows:
..Issuer: Citgo Petroleum Corporation
....Corporate Family Rating to B3 from Caa1
....Probability of Default rating to B3-PD
from Caa1-PD
....Senior Secured Global Notes due 2022 to
B3 (LGD3) From Caa1 (LGD4)
....Senior Secured Term Loan B due 2021 to
B3 (LGD3) From Caa1 (LGD4)
....Senior Secured Revolving Credit Facility
due 2019 to B2 (LGD3) From B3 (LGD4)
..Issuer: Gulf Coast Industrial Development Authority
....Senior Unsecured Industral Revenue Bonds
IRB's to B3 (LGD3) From Caa1 (LGD4)
..Issuer: Illinois Development Finance Authority
....Senior Unsecured Industral Revenue Bonds
IRB's to B3 (LGD3) From Caa1 (LGD4)
..Issuer: Citgo Holding Inc.
....Corporate Family Rating to Caa1 from Caa2
....Senior Secured Global Notes due 2020 to
Caa1 (LGD4) from Caa2 (LGD4)
....Probability of Default Rating Assigned
at Caa1-PD
....Senior Secured Term Loan B due 2018,
withdrawn, previously rated Caa2 (LGD4)
Outlook Actions:
..Issuer: Citgo Petroleum Corporation
....Outlook, Changed To Stable From
Negative
..Issuer: Citgo Holding Inc.
....Outlook, Changed To Stable From
Negative
RATINGS RATIONALE
Although Moody's downgraded the ratings on Petroleos de Venezuela,
S.A. (PDVSA) to C from Ca on March 14, 2018,
the upgrades on the ratings of Citgo Petroleum and Citgo Holding were
based on Moody's view that current ratings better reflect the credit
risk that derives from continued deterioration in the business and financial
profile of their ultimate parent company, PDVSA. Bondholders
at Citgo Petroleum and Citgo Holding, both domiciled in the US,
are protected with security packages and restrictions related to increase
in debt leverage, dividend payments, asset sales, and
new business associations, among other. In addition,
the companies' refineries continue to generate good financial results,
fund capital spending internally, maintain a solid liquidity profile
and access to capital markets, including cash and committed bank
facilities. However, Moody's notes that both companies
lack independent boards, with members and senior management appointed
by PDVSA.
The ratings of the senior secured credit facility and other classes of
debt reflect their priority claim under Moody's Loss Given Default methodology.
CITGO Petroleum Corporation's senior secured revolving credit facility
is rated one notch higher than its Corporate Family Rating because of
its priority claim to certain assets of the company. The remaining
debt for both companies is rated at the same level as the Corporate Family
Ratings.
PDVSA is the ultimate controlling shareholder of Citgo Petroleum and Citgo
Holding.
Citgo Petroleum Corporation, based in Delaware, US,
is an independent refining company with 749,000 bpd of capacity
in three large refineries that have good logistical and market positions
in the US Gulf Coast and Midwest markets. Citgo Petroleum is a
wholly owned subsidiary of PDVSA, the state oil company of Venezuela.
As of September 2017, Citgo Petroleum reported assets and EBITDA
of $7.9 billion and $1.3 billion, respectively.
Citgo Holding, Inc, based In Delaware, US, is
holding company with no direct operations and no significant assets other
than its ownership of 100% of the capital stock of Citgo Petroleum
Corporation and 100% of the limited liability company interests
of Citgo Holding Terminals, Southwest Pipeline Holding and Midwest
Pipeline Holding, all operating companies.
The principal methodology used in these ratings was Refining and Marketing
Industry published in November 2016. Please see the Rating Methodologies
page on www.moodys.com for a copy of this methodology.
REGULATORY DISCLOSURES
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the credit rating action on the support provider and in relation to
each particular credit rating action for securities that derive their
credit ratings from the support provider's credit rating.
For provisional ratings, this announcement provides certain regulatory
disclosures in relation to the provisional rating assigned, and
in relation to a definitive rating that may be assigned subsequent to
the final issuance of the debt, in each case where the transaction
structure and terms have not changed prior to the assignment of the definitive
rating in a manner that would have affected the rating. For further
information please see the ratings tab on the issuer/entity page for the
respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Nymia C. Almeida
VP - Senior Credit Officer
Corporate Finance Group
Moody's de Mexico S.A. de C.V
Ave. Paseo de las Palmas
No. 405 - 502
Col. Lomas de Chapultepec
Mexico, DF 11000
Mexico
JOURNALISTS: 1 888 779 5833
Client Service: 1 212 553 1653
Marianna Waltz, CFA
MD - Corporate Finance
Corporate Finance Group
JOURNALISTS: 800 891 2518
Client Service: 1 212 553 1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653