Duquesne sets Oct. 12 retail launch for $1.445 billion facility

By Sara Rosenberg

New York, Sept. 28 - Duquesne Light Holdings has scheduled a general syndication bank meeting for Oct. 12 to launch its proposed $1.445 billion credit facility, according to a market source.

An arrangers and senior managing agents meeting already took place on Sept. 21.

Barclays and Dresdner are the joint lead arrangers and bookrunners on the deal, with Barclays the administrative agent.

The facility consists of a $75 million revolver at the operating company level, a $200 million revolver for capital spending at the holding company level and a $1.17 billion term loan at the holding company level, with all three tranches being talked at Libor plus 80 basis points, the source said.

Proceeds will be used to help fund the acquisition of Duquesne by Macquarie Infrastructure Partners and Diversified Utility and Energy Trusts, to repay existing Duquesne debt and preference shares, and for capital expenditure and general corporate purposes.

Other acquisition financing will come from $954 million in Macquarie Consortium cash equity and $141 million of newly issued shares of Duquesne contributed by members of the consortium.

Under the acquisition agreement, the consortium will purchase Duquesne for $20.00 per share in cash. The transaction has a total equity market value of $1.59 billion, plus the consortium will also assume $148 million of Duquesne's preferred and preference shares on issue as well as $1.26 billion of long-term debt.

Following the acquisition, Duquesne, a Pittsburgh-based electric utility company, will be a wholly owned subsidiary of Castor Holdings LLC.

On Sept. 1, Duquesne closed on a new $200 million unsecured term loan due September 2011, with pricing that can range from Libor plus 62.5 to 175 bps, depending on the company's senior unsecured credit rating.

Proceeds from this term loan, also led by Barclays and Dresdner, were used to help fund the acquisition of minority interests in Conemaugh Generating Station and Keystone Generating Station and for general corporate purposes.

This $200 million unsecured term loan was launched for syndication only to the participants at the September arranger and senior managing agent bank meeting. It is not being presented as part of the company's credit facility at the retail bank meeting.

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