http://www.chron.com/disp/story.mpl/headline/biz/6202449.html Citigroup says LyondellBasell owes it $2 billion Bloomberg News Jan. 9, 2009, 11:37AM Citigroup Inc. said it’s owed $2 billion by LyondellBasell Industries AF, the chemicals maker that put its U.S. unit into bankruptcy.
The bank recorded costs of about $1.4 billion before taxes in the fourth quarter as a result of the loans, according to an e-mailed release today. Most of the charge went toward loan-loss reserves, New York-based Citigroup said.
Citigroup, which helped lead the loan financing of the $12.7 billion merger that created the chemicals maker, sold $1.9 billion of its LyondellBasell loans in April. The New York-based bank reduced $69 billion of commitments to companies being taken private last year after posting billions of dollars of losses.
Goldman Sachs Group Inc., Merrill Lynch & Co., ABN Amro Holding NV and UBS AG also financed Basell AF’s acquisition of Lyondell Chemical Co. — creating Rotterdam-based LyondellBasell — with $12.5 billion of first-lien bank loans; $5.5 billion of second-lien notes and loans; and $2.5 billion of third-lien notes and loans, according to Standard & Poor’s. First-lien lenders are first in line to be paid back when a borrower defaults.
Lyondell Chemical Co. filed for bankruptcy protection Jan. 6, citing waning demand for its products. The company listed debt of more than $19 billion and assets of about $27 billion.
Apollo Management LP bought part of Citigroup’s LyondellBasell loans last year, according to people with knowledge of the transaction. Apollo now holds $2.2 billion of Lyondell debt, according to bankruptcy court papers.
The company is seeking final approval for an $8 billion debtor-in-possession loan to fund operations through bankruptcy. The loan, the biggest in bankruptcy history, is being provided by a group of 14 lenders. The largest participants are UBS with $770 million; Apollo with $710 million; Cerberus Capital Management LP with $237.5 million; and ABN with $230 million, according to court documents.
CNX Price at posting:
27.1¢ Sentiment: None Disclosure: Not Held
