Talen Energy plans debt financing for acquisition of MACH Gen

By Sara Rosenberg

New York, July 20 – Talen Energy Corp. has received a commitment for debt financing to help fund its purchase of MACH Gen LLC, company officials said in a conference call on Monday.

The company is considering secured and/or unsecured debt for the transaction, with the final financing plan taking into consideration market conditions, the amount of the existing MACH Gen debt to be retained and expected proceeds from FERC mitigation sales and other pending divestitures.

Talen is planning on seeking MACH Gen lender approval to allow for the transaction and leave the current MACH Gen credit facility in place.

As of Dec. 31, 2014, the MACH Gen credit facility was comprised of a roughly $478 million secured term loan and a $160 million secured revolver, of which about $84 million was outstanding.

Officials said in the call that if the MACH Gen debt needs to be refinanced it is more likely that a term loan B will be part of the financing picture, and if the MACH Gen debt will remain outstanding, then Talen will probably be more biased toward selling notes to help fund the acquisition.

The new debt would be issued at Talen Energy Supply LLC.

Citigroup Global Markets Inc. is the lead on the proposed debt financing.

Under the agreement, MACH Gen is being bought for $1,175,000,000 inclusive of any assumed debt, subject to customary purchase price adjustments.

Closing is expected by year-end, subject to regulatory approvals.

Talen is an Allentown, Pa.-based energy and power generation company. MACH Gen is an Athens, N.Y.-based operator of gas-fired generation plants.

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