Dynegy expects to meet debt maturities through first half of 2003

New York, Nov. 19 - Dynegy Holdings Inc. said it expects to be able to meet its debt maturities for the first half of 2003, including a big revolver maturity in the second quarter.

The Houston energy company said in a filing with the Securities and Exchange Commission that its current liquidity should be enough to meet first quarter maturities.

Initiatives to improve liquidity and cash generated from exiting the third-party risk management portion of its trading business should meet all or a "sufficient" portion of the second quarter maturities, the company added.

Dynegy's upcoming maturities are:

* Fourth quarter 2002: $40 million for its Canadian credit facility, $11.7 million of ABG Gas Supply payment under Project Alpha;

* First quarter 2003: $200 million for the Renaissance/Rolling Hills interim financing, $18.9 million under its Black Thunder financing and $18.1 million of ABG Gas Supply payment under Project Alpha;

* Second quarter 2003: $789 million under Dynegy's $900 million revolving credit facility (figure is amount outstanding including $661 million of letters of credit), $382 million under Dynegy's $400 million revolving credit facility (figure is amount outstanding, all letters of credit), $21.6 million under its Black Thunder financing and $18.1 million of ABG Gas Supply payment under Project Alpha;

* Third quarter 2003: $21.6 million under its Black Thunder financing and $18.4 million of ABG Gas Supply payment under Project Alpha;

* Fourth quarter 2003: $21.6 million under its Black Thunder financing and $18.7 million of ABG Gas Supply payment under Project Alpha.

Noting the "significant" revolver maturities in the second quarter of 2003, Dynegy said in the SEC filing that it has begun discussions with its lenders about refinancing all or a portion of the facilities.

If successful, Dynegy said it expects new facilities would be smaller, carry higher pricing and include more restrictive terms than the current revolvers.

In addition to needing to refinance the facilities, Dynegy also cautioned on its ability to comply with covenants.

"While many of the charges incurred by the company during 2002 are excluded from the compliance calculations, continued weakness in the company's operating results compared with results in 2001 will make it more difficult for the company to continue to comply with certain of its financial covenants," Dynegy said.

The company also warned that if it does not execute the rest of its strategy it may have to consider other strategic alternatives including a possible bankruptcy filing.

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