Frontera launches $65 million incremental term loan at 99.75-par OID

By Sara Rosenberg

New York, Oct. 3 – Frontera Generation Holdings LLC launched on Wednesday its $65 million incremental covenant-light term loan B due May 2, 2025 with price talk of Libor plus 425 basis points with a 1% Libor floor and an original issue discount of 99.75 to par, according to a market source.

The incremental 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 more than 3.75 times, with steps, the source said.

Morgan Stanley Senior Funding Inc. is the bookrunner and lead arranger on the deal.

Proceeds will be used to fund cash to the Lonestar Generation LLC balance sheet and to pay transaction fees and expenses.

Along with the incremental, the company is seeking an amendment to its existing credit agreement.

Lenders are being offered a 25 bps amendment fee.

Commitments and consents are due at 5 p.m. ET on Oct. 10, the source added.

Frontera is a gas turbine power generation facility located in Mission, Texas.

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