Dynegy Holdings to buy back $830 million of 6 7/8% notes, 8¾% notes

By Angela McDaniels

Tacoma, Wash., Dec. 14 - Dynegy Inc. subsidiary Dynegy Holdings Inc. agreed to repurchase approximately $420 million of its 6 7/8% senior unsecured notes due 2011 and approximately $410 million of its 8¾% senior unsecured notes due 2012.

The repurchase will be made under an agreement reached with an investor on Dec. 11 and is expected to settle by Dec. 31, according to an 8-K filing with the Securities and Exchange Commission.

The notes to be repurchased represent 83% of the notes due 2011 and 2012.

The total payment will be approximately $875 million, which includes a consent fee.

The investor granted consent to amend the indenture governing the notes. The anticipated amendments will delete section 7.04 - Reports by the Company; delete subsection two of section 8.01 - Company May Consolidate, Etc., Only on Certain Terms; delete section 10.05 - Purchase of Securities by Company or Subsidiary; and delete section 10.06 - Limitation on Liens.

Bank of America Merrill Lynch is the repurchase agent for the transaction.

Houston-based Dynegy produces and sells electric energy, capacity and ancillary services through its subsidiaries.

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