CARACAS, Feb 5 (Reuters) - Venezuela’s U.S. refining unit Citgo was forced to sweeten the terms of a $2.5 billion financing package aimed at pumping new cash into the coffers of the South American country’s state-owned oil company PDVSA, Thomson Reuters IFR reported on Thursday.
Concerns over the outlook for the battered U.S. energy sector along with skepticism over the ultimate goal of the transaction are forcing Citgo to offer investors a yield close to 12 percent, much higher than originally anticipated, according to IFR.
By pledging some of its most valuable assets abroad, recession-hit Venezuela is hoping to raise new funds to fend off default worries and a slide in crude oil prices, its main source of foreign exchange.
Citgo in January said PDVSA had canceled a planned sale of the company, announcing instead that it would raise funds through a financing package made up of bonds and a loan, according to IFR. (Writing by Brian Ellsworth; Editing by Phil Berlowitz)