Frontera lifts loan to $700 million, flexes to Libor plus 425 bps

By Sara Rosenberg

New York, April 25 – Frontera Generation Holdings LLC upsized its seven-year covenant-light term loan B to $700 million from $675 million and reduced pricing to Libor plus 425 basis points from Libor plus 450 bps, according to a market source.

Also, the original issue discount on the term loan was tightened to 99.5 from 99, the source said.

The term loan still has a 1% Libor floor and 101 soft call protection for six months.

The company’s now $735 million of senior secured credit facilities, up from $710 million, also include a $35 million five-year revolver.

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

Recommitments were scheduled to be due at 11 a.m. ET on Wednesday, the source added.

Proceeds will be used to refinance the existing Lonestar Generation LLC credit facilities, and the extra funds being raised through the term loan upsizing will be used to fund working capital at Lonestar Generation.

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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