Tennessee Energy wraps successful solicitation for series 2006 bonds

By Jennifer Chiou

New York, Jan. 11 - Tennessee Energy Acquisition Corp. announced that it has satisfied all of the conditions for its previously announced consent solicitation for its series 2006A and series 2006B gas project revenue bonds.

As announced last month, the company solicited consents to proposed amendments that would allow it to complete the following:

• Amend its gas purchase agreement with gas supplier J. Aron & Co. to eliminate a seller default if Goldman Sachs Group, Inc. fails to maintain a credit rating of BBB- or higher by Standard & Poor's or Baa3 or higher by Moody's Investors Service, or otherwise post credit support; and

• Enter into a receivables purchase agreement with the gas supplier to provide credit support for project participants and reduce the reliance on the investment agreements in the senior and reserve subaccounts of the debt service reserve account. The existing guaranty from Goldman Sachs will be amended to include the gas supplier's payment obligations under the receivables purchase agreement. The receivables purchase agreement will allow Moody's and S&P to assign ratings to the series 2006A bonds unconstrained by the ratings of MBIA, Depfa or any of the project participants.

The solicitation expired at 5 p.m. ET on Jan. 6. It began on Dec. 12.

Consents were needed from the holders of a majority of the two series of bonds, voting separately.

The effectiveness of the proposed amendments were subject to some conditions that include the series 2006A bonds receiving ratings of at least A3 from Moody's, A- from S&P and A from Fitch Ratings and the series 2006B bonds maintaining a rating of at least BBB from Fitch.

As reported in December, the holders of a majority of the series 2006B bonds gave their oral agreement to deliver their consents, and the holders of $34.79 million of the series 2006A bonds have done likewise.

The solicitation agent was Wells Fargo Securities, LLC (866 309-6316 or 704 715-8341). The information agent and tabulation agent was D.F. King & Co., Inc. (800 431-9645 or 212 269-5550).

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.