E-mail us: service@prospectnews.com Or call: 212 374 2800
Bank Loans - CLOs - Convertibles - Distressed Debt - Emerging Markets
Green Finance - High Yield - Investment Grade - Liability Management
Preferreds - Private Placements - Structured Products
 
Published on 3/8/2007 in the Prospect News Bank Loan Daily.

Moody's rates Entegra loans B3

Moody's Investors Service said it assigned B3 ratings to Entegra TC LLC's proposed $450 million second-lien term loan due 2014 and $30 million second-lien synthetic revolving credit facility due 2014.

The outlook is stable.

Proceeds from the term loan, along with cash on hand and $850 million from the issuance of unrated third lien paid-in-kind debt due 2015 by Entegra parent company Entegra Holdings LLC, will be used to refinance existing debt, to fund $44 million of major maintenance, to fund $20 million of debt service reserve accounts, to pay transaction expenses and to distribute up to $548 million to existing owners.

The agency said the B3 rating assigned to Entegra's second-lien credit facilities reflects the company's highly leveraged consolidated capital structure, its significant exposure to power price volatility and its subordination to first-lien creditors. Entegra is party to an unrated $350 million first-lien hedging letter-of-credit facility to support its in-house energy management group's efforts to hedge the company's generating capacity. While Entegra has not experienced any draws on issued letters of credit, Fitch said this facility could potentially pressure liquidity and impact the recovery of the second-lien facilities.

The ratings are, however, supported by the predictable cash flow stream resulting from a 10-year 510-megawatt tolling agreement, the strong operating history of subsidiaries Gila River Power LP and Union Power Partners LP and project finance features that include cash-funded major maintenance and debt service reserve accounts and mandatory debt repayment, Fitch said.


© 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.