Heritage Power downsizes term loan B to $520 million, ups spread to Libor plus 600 bps

By Sara Rosenberg

New York, June 28 – Heritage Power LLC downsized its seven-year term loan B to $520 million from $550 million, according to a market source.

Also, pricing on the term loan B and on a $61.1 million seven-year term loan C was increased to Libor plus 600 basis points from Libor plus 475 bps and the original issue discount widened to 98 from 98.5, the source said.

The term loans still have a 0% Libor floor, 101 soft call protection for six months, a debt service coverage ratio covenant and a 100% excess cash flow sweep with leverage-based step-downs.

The term loans are being sold as a strip.

The company’s now $626.1 million of credit facilities, down from $656.1 million, also include a $45 million five-year revolver.

Jefferies LLC and Morgan Stanley Senior Funding Inc. are the arrangers on the deal.

Commitments are due at 4 p.m. ET on Tuesday, extended from 4 p.m. ET on Friday, the source added.

Proceeds will be used to fund commercial letters of credit, to repay existing debt, for general corporate purposes at the parent company, GenOn Holdings LLC, and to pay transaction related expenses. The dividend component was removed from the use of proceeds with the term loan B downsizing.

Heritage is an owner of natural gas and oil-fueled power generation facilities.

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