Texas Competitive talks $3.5 billion term debt at Libor plus 450 bps

By Sara Rosenberg

New York, July 12 – Texas Competitive Electric Holdings Co. LLC launched on Tuesday its $2.85 billion seven-year covenant-light term loan B and $650 million seven-year covenant-light term loan C with price talk of Libor plus 450 basis points with a 1% Libor floor and an original issue discount of 98.5 to 99, according to a market source.

The term loans have 101 soft call protection for six months.

Amortization on the term loan B is 1% per annum, and the term loan C has no amortization until the term loan B is repaid.

The company’s $4.25 billion senior secured credit facility (Baa3/BB-) also includes a $750 million five-year revolver.

Under the accordion, incremental first-lien secured debt is limited to the sum of $1 billion plus an unlimited amount subject to 3x first-lien net secured leverage, with 50 bps of MFN for 12 months.

Deutsche Bank Securities Inc., Barclays, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, RBC Capital Markets, UBS Investment Bank and Natixis are the bookrunners on the deal.

Commitments are due on July 26, with closing targeted for the week of Aug. 1.

Proceeds will be used to refinance an existing debtor-in-possession financing facility and then will convert to a permanent exit facility upon the company’s emergence from bankruptcy.

The company expects to exit bankruptcy before the end of this year.

Leverage upon emergence from bankruptcy is anticipated to be 1.9x on a gross basis and 1.5x on a net basis.

Texas Competitive is a Dallas-based power generation company.

© 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.