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AES Drax bank and bondholders approve restructuring; top tiers to be paid in full
By Carlise Newman
Chicago, June 30 - Steering committees for banks and bondholders with money at stake in the restructuring of AES Corp.'s Drax U.K. power station have agreed to a restructuring deal that will replace existing senior secured debt with new secured debt, and give secured creditors equity.
In addition, AES has entered into a third standstill agreement with its bond trustee under the eurobonds, certain senior bondholders representing a majority in sterling equivalent principal amount of the senior bonds, and the senior bond trustee. The agreement, which previously expired on June 30, now will expire on July 31.
The restructuring deal will provide that cash-flow from the Surrey, England-based power station will pay the top two tiers of creditors. Money that Drax plans to collect through the insolvency of failed counterparty TXU Europe will pay the next group.
The senior secured creditors consist of the senior banks with an allowed claim of £842.5 million; holders of 10.41% senior secured notes due 2020 with allowed claims of $302.4 million; holders of 9.07% senior secured notes due 2025 with allowed claims of $200 million; and the interest rate hedging banks and the currency swap hedging banks with allowed claims of £91.4 million.
The A-1 debt will be replaced with the sterling equivalent amount of £400 million due 2015 at a rate of Libor plus 2.5%, and the A-2 debt with up to £460 million due 2014 at a rate of Libor plus 3%. The B debt will be replaced with £338.4 million due 2020 at a rate of Libor plus 3%; and the C debt replaced with up to £135.4 million, due 2025 at a rate of Libor plus 5%.
The secured creditors will receive 100% indirect ownership of the Drax power station.
In addition, for each £1 owed to a secured creditor, each creditor will be entitled to the same participating interest in each of the tranches of debt.
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