Illinois Power seeking to sell first mortgage bonds in third quarter

By Paul A. Harris

St. Louis, Mo., Aug. 15 - Illinois Power Co. is seeking to sell first mortgage bonds during the third quarter of 2002, according to documents that Illinois Power filed with the Securities and Exchange Commission Wednesday.

Illinois Power, an indirect wholly-owned subsidiary of Dynegy Inc., pulled an earlier investment-grade rated $325 million offering on July 23 after pricing because Illinois Power and parent Dynegy were downgraded to junk.

Illinois Power's first mortgage bonds are now rated Ba2 by Moody's Investors Service and B+ by Standard & Poor's.

The syndicate on the investment-grade offering had Merrill Lynch & Co. as lead manager with co-managers Credit Lyonnais, Deutsche Bank Securities Inc., SG Cowen and TD Securities.

Officials from several of those institutions declined to comment on the new offering when contacted Thursday.

No use of proceeds was included in the filings. But when Dynegy originally announced the sale on June 24 as part of its new capital plan it said Illinois Power would sell $300 to $400 million of mortgage bonds to repay outstanding debt.

Telephone calls from Prospect News to Dynegy Thursday were unreturned.

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