NEW YORK - Credit Suisse First Boston has started selling a $450 million loan for Lyondell-Citgo Refining Co., a Houston-based joint venture 59% -owned by Lyondell, which replaces a bank loan that expired in May.
The interest rate on the one-year loan will rise over the life of the loan, a feature that encourages the company to replace the loan with longer-term debt financing, according to people familiar with the credit.
The yield begins at 150 basis points more than the London interbank offered rate, or Libor, and climbs to 525 basis points more than Libor after 12 months. Bank of America Corp. and Societe Generale are syndication agents on the loan.
Lyondell-Citgo Refining, which produced an average of 193,000 barrels of crude oil a day in the second quarter, is raising the money to replace a $450 million loan that matured in May. That five-year loan was arranged by Bank of New York.
The joint venture generated earnings before interest, tax, depreciation, and amortization, of $24 million in the second quarter, versus a loss of $1 million in the same period last year. Credit Suisse held a bank meeting for the loan Tuesday in Houston.