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SAN ANTONIO (AP) _ Tesoro Petroleum Corp. has headed off a potential cash crunch by getting lenders to accept a crucial change in a loan agreement.

Tesoro's bankers suspended cash-flow requirements in the loan agreement through the first half of next year.

But in exchange, the lenders required Tesoro to pay higher interest rates on $1.275 billion in debt and accept tougher spending limits.

Investors had worried that without the change in the loan amendment, Tesoro would violate its loan agreement for the third quarter, which ends Monday. If the San Antonio-based company had violated the agreement, the bankers could have demanded immediate repayment of the loans.

Tesoro, which owns six refineries in the western United States, has been under financial pressure because of thin profit margins in the petroleum refining business caused by weak demand for diesel, jet fuel and heating oil.

Under the agreement, Tesoro will pay 8 percent interest instead of 7 percent, said Scott Spendlove, Tesoro's vice president of finance.

The company also must raise $200 million by March 31 for debt reduction, either through asset sales or a stock offering, according to a document the company filed Wednesday with the Securities and Exchange Commission.

Tesoro has already announced plans to sell $200 million in assets by year end to pay down debt. The banks also required Tesoro to cap its spending at $253.5 million this year and $210 million next year.

Shares of Tesoro rose 11 percent Wednesday on news of the agreement with lenders. In trading Thursday, Tesoro shares rose 7 cents to close at $3.12 on the New York Stock Exchange. Still, the stock has lost three-fourths of its value this year.