Terra-Gen Finance cuts term loan B to $250 million, increases spread to Libor plus 500 bps

By Sara Rosenberg

New York, June 20 - Terra-Gen Finance Co. LLC downsized its six-year term loan B to $250 million from $300 million and raised pricing to Libor plus 500 basis points from Libor plus 400 bps, according to a market source.

Also, the Libor floor increased to 1.5% from 1.25% and the original issue discount widened to 98½ from 991/2, the source said.

Furthermore, the soft call protection was sweetened to 102 in year one and 101 in year two from just 101 for one year.

The company's now $310 million senior secured credit facility (Ba3/BB/BB-), down from $360 million, still includes a $60 million five-year working capital revolver.

Goldman Sachs & Co. and Credit Suisse Securities (USA) LLC are the joint lead arrangers, joint bookrunners and syndication agents on the deal.

Proceeds from the term loan will be used to fully repay existing corporate level debt, to fund a cash distribution to parent company Terra-Gen Power LLC and partially fund a debt service reserve. The revolver will be used to issue letters of credit and to partially fund the debt service reserve.

As a result of the term loan downsizing, the size of the dividend was reduced, the source added.

Terra-Gen is a New York-based renewable energy provider.

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