Parkway firms $1.14 billion of term loans at Libor plus 475 bps

By Sara Rosenberg

New York, Nov. 5 – Parkway Generation LLC set pricing on its $1.14 billion of seven-year senior secured term loans (Ba3/BB) at Libor plus 475 basis points, the high end of the Libor plus 450 bps to 475 bps talk, according to a market source.

Also, documentation was revised to reduce the tax distribution cap to $40 million from $50 million and add quarterly calls, the source said.

The term loan debt, split between a $1 billion term loan B and a $140 million term loan C, still has a 0.75% Libor floor, an original issue discount of 99, 101 soft call protection for six months, a 1.1x debt service coverage ratio covenant and a six-month debt service reserve account.

Ticking fees on the term loan debt are half the margin from days 46 to 90 and the full margin thereafter.

Amortization on the term loan B is 1% per annum. The term loan C has no amortization.

Cash sweep is 75%, stepping down to 50% at 3x consolidated total net leverage.

Morgan Stanley Senior Funding Inc., Jefferies LLC, BNP Paribas Securities Corp. and Goldman Sachs Bank USA are the joint lead arrangers and bookrunners on the deal.

Proceeds from the term loan B will be used to help fund ArcLight Capital Partners’ acquisition of Public Service Enterprise Group Inc.’s portfolio of eight natural gas-fired power generation facilities in New Jersey and Maryland totaling 4,805 MW (Parkway Generation), and the term loan C will be used to fund a collateral account to cash collateralize the issuance of letters of credit.

Closing is expected in mid-December.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.