CITGO Petroleum is holding investor calls as part of a non-deal roadshow, according to five sources following the situation.

Barclays is conducting outreach on behalf of the oil refinery, three of the sources said.

The efforts come as CITGO has a USD 650m first lien note due 2022, the sources said. 

The USD 650m 6.25% senior secured notes due 2022 last traded at par to yield 6.25% on 29 January, up from recent lows at 92.75 to yield 10.83% in November 2020, according to MarketAxess. 

The PdVSA subsidiary last tapped the primary market in June 2020 for USD 1.125bn 7% senior secured notes due 2025. The offering, led by Jefferies and JPMorgan, was upsized to USD 1.125bn from USD 750m. Proceeds from the deal were used to pay down a term loan due 2021, add cash to the balance sheet and to fund general corporate purposes.

The USD 1.125bn 7% senior secured notes due 2025 traded today at 102 to yield 6.328%, up from recent lows at 90.75 to yield 9.521% in November 2020. 

In December 2020, Barclays agreed to provide a two-year USD 250m accounts receivable securitization facility, proceeds from which are expected to be used for general corporate purposes.

The AR facility, coupled with an expected CARES Act tax refund of USD 400m-500m in 2Q21, will likely alleviate company’s cash flow pressures this year, according to Standard and Poor’s note on 17 December. Under current refining conditions, CITGO is projected to burn USD 200m-250m of cash a quarter through 2Q21, the rating agency said.

The company has been battered by depressed demand for refined products amid COVID-19 and an eight-week shutdown at its Lake Charles refinery due to Hurricanes Laura and Delta. As of 3Q20, it reported negative USD 183m in adjusted EBITDA.

CITGO made headlines late last year, when a Venezuelan court found six former Citgo executives guilty of corruption and sentenced them to prison. 

Two Venezuela court officials became the target of new US sanctions over their involvement in a trial of six former CITGO executives, the US Treasury Department announced in December.

CITGO has had quite a few executive suite changes throughout 2020. The board appointed Edgar Rincon as Chief Operating Officer and Executive Vice President, and John Zuklic as CFO. Meanwhile, Chairwoman Luisa Palacios resigned from her position in October.

CITGO and Barclays did not respond to requests for comment.

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