CITGO Buyback

Tender offer on $400 million in notes

Published in CSP Daily News

HOUSTON -- In a move that may become more popular as oil companies realize higher refining revenues, CITGO announced it has commenced a tender offer foror a buying back ofcertain senior notes worth roughly $400 million.

The Houston-based company announced the cash tender offers for outstanding 7-7/8% senior notes and 6% notes, with roughly $150 million and $250 million respectively in aggregate principal amounts outstanding. The tender offers will expire at midnight, East Coast time on Wednesday, Nov. 9, 2005, the company said.

Such moves may become more indicative of the oil companies, said Peter Zeihan, senior analyst at Stratfor, Austin, Texas. The analyst said oil companies that have been receiving increased revenue from higher gasoline prices have been using the generated cash to pay down debt or repurchase stock to regain leverage and control. You're seeing a lot of buybacks these days, he said. Companies want to gain more control.

Attempts to contact the company for more information were unsuccessful.

J.P. Morgan Securities Inc. is what CITGO calls the dealer manager and solicitation agent for the tender offers.

CITGO is a refiner, transporter and marketer of transportation fuels, lubricants, petrochemicals, refined waxes, asphalt and other industrial products. The company is owned by PDV America Inc., an indirect, wholly owned subsidiary of Petr aleos de Venezuela, SA (PDVSA), the national oil company of the Bolivarian Republic of Venezuela.