Frontera Generation launches $675 million loan at Libor plus 450 bps

By Sara Rosenberg

New York, April 13 – Frontera Generation Holdings LLC launched on Friday its $675 million seven-year covenant-light term loan B with price talk of Libor plus 450 basis points with a 1% Libor floor and an original issue discount of 99, according to a market source.

The term loan has 101 soft call protection for six months, amortization of 1% per annum and an excess cash flow sweep of 100% when consolidated net leverage is greater than 3.75 times with steps, the source said.

The company’s $710 million of senior secured credit facilities also include a $35 million five-year revolver.

Morgan Stanley Senior Funding Inc. and MUFG are the leads on the deal.

Commitments are due on April 26, the source added.

Proceeds will be used to refinance the existing Lonestar Generation LLC credit facilities.

Frontera is a 526 MW combined cycle gas turbine power generation facility located in Mission, Texas. The plant holds a presidential permit and export authorization from the U.S. Department of Energy permitting the export of 100% of the plant’s generation into Mexico on its own dedicated transmission line.

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