Reliant Energy again extends, amends consent solicitation for 6¾%, 9¼%, 9½% notes

By Laura Lutz

Des Moines, Nov. 9 - Reliant Energy Inc. again extended its solicitation of consents from holders of its 9¼% senior secured notes due 2010, 9½% senior secured notes due 2013 and 6¾% senior secured notes due 2014, this time to 5 p.m. ET on Nov. 14.

The company also further modified the terms of the consent solicitation in response to concerns raised by bondholders.

Under the amended terms, the company will waive its right to call the bonds for 18 months and will eliminate the consent fee in the solicitation.

The company also modified the solicitation on Oct. 27 in response to bondholder concerns.

Those changes include refinancing the $450 million receivables securitization at Reliant Energy instead of at the retail group, adding a covenant to require the retail group to distribute cash to Reliant in certain circumstances, reducing the amount of permitted debt at the retail group and reducing the size of the working capital facility and limiting its use to working capital purposes.

The company also said it would offer to provide consent rights to the notes for the release of liens - other than in connection with a sale or upon obtaining certain credit metrics - in all or substantially all of the retail group or wholesale business. In the event of a sale of all or substantially all of the retail group or wholesale business, certain rights to exclude net sale proceeds from redemption offers would no longer apply and the revenue bonds would join the notes in being eligible for the offers.

The expiration deadline was previously on Nov. 7. Before that, it was set for Sept. 26, Aug. 30, Aug. 3, Sept. 1, Sept. 13, Oct. 4, Oct. 18 and Oct. 27.

The solicitation also covers five series of Pennsylvania Economic Development Financing Authority's outstanding exempt facilities revenue bonds (Reliant Energy Seward, LLC Project).

As announced on July 26, the primary purpose of the consent solicitation is to amend the indentures governing the bonds to permit Reliant Energy to enter into a new retail credit structure, which is intended to substantially eliminate collateral postings and reduce liquidity requirements associated with procuring supply for the company's retail energy business.

The proposed amendments would permit the debt associated with a new working capital credit facility, would permit the liens contemplated by the facility, would permit restrictions on the ability of the retail energy business to upstream money to Reliant Energy and make certain other technical amendments to permit the new retail credit structure.

Before the terms were modified, noteholders who consented before the expiration were to receive a $2.50 consent fee, previously increased from $1.25, per $1,000 principal amount of notes.

Global Bondholder Services Corp. (212 430-3774 for banks and brokers, 866 873-6300 for others) is the information agent, and Goldman, Sachs & Co. (212 902-0041 or 800 828-3182) is solicitation agent.

The Houston-based energy company said it must receive consents from holders of a majority of the notes to approve the amendments.

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