Cedar Bay launches $250 million term loan at Libor plus 500 bps

By Sara Rosenberg

New York, March 20 - Cedar Bay Generating Co. LP launched on Wednesday its $250 million seven-year senior secured term loan with price talk of Libor plus 500 basis points with a 1.25% Libor floor and an original issue discount of 99, according to a market source.

The loan is non-callable for six months, then has 101 soft call for the next 12 months, the source said.

Covenants include a leverage ratio.

Initially, the loan was expected to be sized at $275 million, but the timeline for closing of the transaction shifted so that the company benefits from an extra quarter roll-forward, and as a result the debt quantum required was reduced by $25 million, the source explained.

Barclays and Morgan Stanley Senior Funding Inc. are the bookrunners on the deal.

Proceeds will be used to refinance existing debt, fund a debt service reserve account and repay some subordinated debt, the source said.

Expected facility ratings are in the low-to-mid BB's, the source added.

Leverage is 3.3 times 2013 EBITDA and 2.9 times 2013 cash flow available for debt service.

Commitments are due at 5 p.m. ET on April 3, and closing is targeted for the week of April 8.

Cedar Bay is a coal-fired power plant in Jacksonville, Fla.

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