Lackawanna trims term loan C to $82 million, extends call protection

By Sara Rosenberg

New York, July 20 – Lackawanna Energy Center LLC downsized its six-year term loan C to $82 million from $95 million due to final letter of credit posting requirements, according to a market source.

Pricing on the term loan C as well as on the company’s $380 million six-year term loan B-2 finalized in line with talk at SOFR plus 500 basis points with a 0.5% floor and an original issue discount of 97.

The 101 soft call protection on the term loan B-2 and term loan C strip was revised to one year from six months, the source continued.

The term loan B-2 and term loan C still have amortization of 1% per annum, a six-month debt service reserve account, a 75% excess cash flow sweep and a 1.1x debt service coverage ratio covenant.

The company’s now $932 million of senior secured credit facilities (Ba3/BB-), down from $945 million, also include a $120 million revolver, and a $350 million privately placed term loan B-1 priced at a fixed-rate of 9.5%.

The term loan B-1 is non-callable for two years, then at 101 in year three.

Morgan Stanley Senior Funding Inc., BMO Capital Markets, BNP Paribas Securities Corp. and MUFG are the bookrunners on the deal.

Proceeds from the term loan B will be used to repay the existing debt of the company and the holding company, the term loan C will be used to fund a collateral account to cash collateralize the issuance of letters of credit, and the revolver will fund various short-term working capital requirements and repay an existing working capital loan.

Closing is expected during the week of July 31.

Lackawanna is a 1,483MW combined-cycle natural gas-fired power plant located in Jessup, Pa., in the MAAC sub-region of PJM. The project was developed by Invenergy and has a partnership with Blackrock Global Infrastructure Funds.

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