Power Finance & Risk is pleased to announce the short list for the following award: Term Loan B of 2019.

We have selected four deals that effectively navigated the volatile sub-investment grade credit markets. Let us know if your firm is missing from the credits.

Granite Generation

LS Power refinanced its 4.8 GW Granite Generation portfolio of gas-fired generation assets in PJM Interconnection with a $1.4 billion seven-year term loan B and $100 million five-year revolving credit facility, rated Ba3/BB-. The assets had previously been financed in the bank market. LS Power marketed the leveraged loan as corporate rather than project finance debt and intends to operate the business as an independent power producer with scope for growth. The deal was priced on November 4. Coverage here.

Sponsor: LS Power

Term loan B: $1.4 billion

Revolving credit facility: $100 million

Ratings: Ba3/BB-

Spread: 375 bp

Index floor: 1%

OID: 99

Left lead: Morgan Stanley

Bookrunners: BMO Capital Markets, Credit Suisse, Goldman Sachs, MUFG, RBC

Borrower’s counsel: Milbank

Lenders’ counsel: Shearman & Sterling 

Heritage Power

Having exited Chapter 11, GenOn Holdings set about creating a more efficient capital structure in 2019, refinancing a portfolio of 16 legacy generation assets known as Heritage Power with a $620 million term loan B package. The aging gas-fired plants were unlike other assets that had been in the leveraged loan market recently, meaning that the transaction was an exercise in price discovery. It was originally floated in June but was then reworked before reemerging in mid-July in its final form. It was priced on August 5. Coverage here.

Sponsor: GenOn Holdings

Term loan B: $520 million

LCs: $54 million

Revolving credit facility: $45 million

Ratings: B1/B+

Spread: 600 bp

OID: 98

Left lead: Jefferies

Bookrunner: Morgan Stanley

Lenders’ counsel: Latham & Watkins 


Oregon Clean Energy

Ares Management and I Squared Capital had been planning to refinance their 869 MW Oregon Clean Energy Center gas-fired project in Ohio in the term loan B market in late 2018, but postponed the deal amid deteriorating credit market conditions. They brought the transaction back to investors after the market rebounded in February 2019 and were even able to increase the size of the deal. It was priced at 375 bp over Libor, 25 bp inside initial price thoughts, and closed on March 1. Coverage here.

Sponsors: Ares Management, I Squared Capital

Term loan B: $530 million

Revolving credit facility: $50 million

Ratings: Ba3/BB-

Spread: 375 bp

Index floor: 1%

OID: 99

Left lead: Credit Suisse

Bookrunners: Barclays, ICBC

Co-lead arranger: Kookmin Bank

Lenders’ counsel: Milbank

Independent engineer: E3 Consulting Services

Market consultant: PA Consulting

Environmental consultant: Civil & Environmental Consultants

Insurance consultant: McGriff Seibels & Williams

West Deptford

LS Power refinanced the previously bank-financed 744 MW West Deptford gas-fired project in the term loan B market while retaining the existing, complicated collateral structure, despite concerns of overbuild in PJM Interconnection. The project itself is somewhat historic, having been the first merchant gas-fired plant to reach financial close after the financial crisis. The term loan B refinancing was priced at 375 bp over Libor on July 30. Coverage here.

Sponsor: LS Power

Term loan B: $445 million

Revolving credit facility: $55 million

Ratings: Ba3/BB

Spread: 375 bp

Index floor: 0%

OID: 99.5

Left lead: Credit Suisse

Bookrunners: Morgan Stanley, BNP Paribas, SunTrust Robinson Humphrey, Kookmin Bank

Borrower’s counsel: Latham & Watkins

Lenders’ counsel: Shearman & Sterling





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