Lyondell Lands $2.6 Billion Financing

Lyondell Chemicals has tapped JPMorgan, Bank of America, Citigroup and Morgan Stanley for a $2.575 billion deal.

  • 15 Sep 2006
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Lyondell Chemicals has tapped JPMorgan, Bank of America, Citigroup and Morgan Stanley for a $2.575 billion deal. The credit will be used to complete Lyondell's buyout of the 41.25% stake CITGO Petroleum has in Lyondell-CITGO Refining for approximately $2 billion, plus the assumption of $183 million in CITGO bank debt. It could not be determined if the refinery would be renamed. The financing will also replace $1.075 billion in existing debt, including a Lyondell Chemicals $475 million revolver, a Lyondell-CITGO $150 million revolver and a Lyondell-CITGO $450 million term loan, according to a banker.

"It's a big deal ­ there's always something to do there," an investor said of the number of investment opportunities the large credit offers. The deal consists of a five-year, $800 million revolver and a seven-year, $1.775 billion term loan, according to a banker. Price talk is LIBOR plus 2% on both tranches.

Lyondell also launched a public offering of $1.775 billion of senior secured notes and a cash tender offer for approximately $849 million of 9.625% senior secured notes due to mature May 2007, according to a release. Standard & Poor's rated the facility BB with a recovery rating of 1. A Lyondell spokesman did not return calls seeking comment.

  • 15 Sep 2006

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1 BNP Paribas 13,823 26 18.14
2 Bank of America Merrill Lynch (BAML) 8,207 26 10.77
3 Lloyds Bank 7,202 22 9.45
4 Citi 6,256 16 8.21
5 JP Morgan 5,220 8 6.85

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4 Wells Fargo Securities 77,934.65 225 8.10%
5 Credit Suisse 63,570.21 165 6.61%