New Issue: Dynegy upsizes three-tranche note offering to $1.45 billion

By Paul A. Harris

St. Louis, August 1 - Dynegy Inc. priced an upsized $1.45 billion of second priority senior secured notes (B3/B-) in two fixed-rate tranches and one floating rate tranche, on Friday, according to a syndicate source.

The deal was increased from $1.325 billion and on the heels of Friday morning revisions in the price talk of all three tranches.

The Houston-based energy company priced $525 million of 9 7/8% fixed-rate notes due July 15, 2010 at 99.371 to yield 10%. Revised price talk was for a yield in the 10% area, increased from 9½%-9¾%.

Dynegy also sold $700 million of 10 1/8% fixed-rate notes due July 15, 2013 at 99.217 to yield 10¼%. Revised talk was for a yield in the 10¼% area, increased from 9¾%-10%.

Also the company sold $225 million of floating-rate notes due July 15, 2008 at par with an interest rate of Libor plus 650 basis points. Revised price talk was for a rate in the area of Libor plus 650 basis points, increased from Libor plus 600 to 625 basis points.

Credit Suisse First Boston was bookrunner on the Rule 144A deal. The joint lead managers were Banc of America Securities, Citigroup, JP Morgan, Lehman Brothers and Morgan Stanley. The co-managers were ABN Amro, Banc One Capital Markets, Credit Lyonnais, Deutsche Bank Securities Inc., SG Cowen and TD Securities.

Dynegy will use proceeds to fund the tender for its 8 1/8% notes due 2005, 6¾% notes due 2005 and 7.45% notes due 2006 and also to make a one-time payment to ChevronTexaco as part of a restructuring of the convertible preferred stock held by ChevronTexaco.

Issuer:	Dynegy Inc.
Amount:	$1.45 billion (increased from $1.325 billion)
Security description:	Second priority senior secured notes
Bookrunner:	Credit Suisse First Boston
Joint lead managers:	Banc of America Securities, Citigroup, JP Morgan, Lehman Brothers, Morgan Stanley
Co-managers:	ABN Amro, Banc One Capital Markets, Credit Lyonnais, Deutsche Bank Securities, SG Cowen, TD Securities
Settlement Date:	Aug. 11, 2003
Ratings:	Moody's: B3
	Standard & Poor's: B-
Seven-year fixed-rate tranche
Amount:	$525 million
Maturity:	July 15, 2010
Coupon:	9 7/8%
Price:	99.371
Yield:	10%
Spread:	606 basis points
Call features:	Callable on July 15, 2007 at 104.938, then 102.469, declining to par on July 15, 2009 and thereafter
Equity clawback:	Until July 15, 2006 for 35% at 109.875
Rule 144A Cusip:	26816LAL6
Price talk:	10% area (revised from 9½%-9¾%)
10-year fixed-rate tranche
Amount:	$700 million
Maturity:	July 15, 2013
Coupon:	10 1/8%
Price:	99.217
Yield:	10¼%
Spread:	586 basis points
Call features:	Callable on July 15, 2008 at 105.063, then 103.375, 101.688, declining to par on July 15, 2011 and thereafter
Equity clawback:	Until July 15, 2006 for 35% at 110.125
Rule 144A Cusip:	26816LAP7
Price talk:	10¼% area (revised from 9¾%-10%)
Five-year floating-rate tranche
Amount:	$225 million
Maturity:	July 15, 2008
Interest rate:	Libor plus 650 basis points
Price:	Par
Call features:	Callable on July 15, 2006 at 103, then 101, declining to par
Equity clawback:	Until July 15, 2006 for 35% at par plus Libor plus 650 basis points
Rule 144A Cusip:	26816LAH5
Price talk:	Libor plus 650 basis points area (revised from Libor plus 600-625 basis points)

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