Dynegy $150 million term loan to launch Tuesday

By Sara Rosenberg

New York, May 22 - Dynegy Inc. is scheduled to launch a $150 million term loan (Ba3) on Tuesday, according to a market source.

JPMorgan and Lehman are the joint lead arrangers on the deal.

Proceeds from the term loan, along with $250 million of cash on hand and an offering of class A common stock, will be used to help fund the company's redemption of series C convertible preferred stock for $400 million in cash.

The term loan may be paid down fairly quickly as the company plans to use proceeds from the about $195 million sale of its Rockingham Power Generation Facility to Duke Power Co. LLC to repay the debt.

The Rockingham transaction, which is expected to close before the end of the year, is conditioned upon the expiration or termination of the Hart-Scott-Rodino waiting period, approval by the Federal Energy Regulatory Commission and the North Carolina Utilities Commission, and the fulfillment of customary closing conditions.

The term loan will mature on the earlier of five business days after the consummation of the sale of the Rockingham facility or Jan. 31, 2012.

Dynegy is a Houston-based electric company.

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