Fitch rates Citgo loan BB

Fitch Ratings said it affirmed the issuer default ratings of Citgo Petroleum Corp. at B and Citgo Holding Inc. at CCC.

Fitch also said it removed both issuer default ratings from Rating Watch negative and assigned a stable outlook.

Fitch also said it assigned a BB with recovery rating of RR1 to the company's new $1.2 billion term loan and withdrew the ratings on its revolver, which was eliminated as part of the refinancing.

The rating was affirmed because of the successful replacement of Citgo's 2019 revolver with equivalent liquidity from the new secured term loan, the agency said.

While Citgo was unable to renew its syndicated revolver due to bank concerns over sanctions against PDVSA, it was able to find alternate liquidity in the term loan market to replace both its $900 million senior secured revolver and its A/R securitization program, Fitch explained.

This demonstrated market access also bodes well for the upcoming refinance of the holding company's $1.875 billion 10¾% notes due in February 2020.

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