Talen Energy Supply lines up $75 million letter-of-credit facility

By Sarah Lizee

Olympia, Wash., May 10 – Talen Energy Supply LLC filed a term sheet for a $75 million five-year letter-of-credit facility with the U.S. Bankruptcy Court for the Southern District of Texas on Tuesday.

Barclays Bank plc is the letter-of-credit issuer, and Citibank, NA is the collateral agent.

The commitment fee ranges from 37.5 basis points to 50 bps, based on first-lien net leverage.

There is a 3.5% LoC issuer fee and a 0.125% fronting fee.

If any amount is not paid when due, an event of default will occur, and the overdue amount will bear interest at 5½% per annum.

The facility is expected to close this month.

As previously reported, the company has lined up exit financing in connection with its upcoming emergence from Chapter 11. The financing includes $1.2 billion of seven-year senior secured notes, a $580 million seven-year senior secured term loan B and a $470 million seven-year senior secured term loan C. The company is also conducting a $1.4 billion equity rights offering.

Houston-based Talen Energy Supply is one of the largest competitive power generation and infrastructure companies in North America. The company filed bankruptcy on May 9, 2022 under Chapter 11 case number 22-90054.

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