Allegheny Energy Supply shops $1.075 billion term loan

By Sara Rosenberg

New York, June 29 - Allegheny Energy Supply Co. LLC in in-market with a $1.075 billion term loan that will be used to refinance existing bank and bond debt, according to a market source.

Citigroup is the lead bank on the deal.

The term loan is talked at Libor plus 200 basis points with a step down to Libor plus 175 bps on a ratings upgrade, the source said.

More specifically, proceeds from the term loan will be used to refinance the company's existing term loan, under which there is $744 million outstanding, and about $331 million principal amount of the 10.25% senior notes due November 2007. Also, Allegheny Energy Supply will redeem $35 million of its 13% senior notes due November 2007.

The company anticipates closing on the new facility by the end of July, with the funding for the refinancing of the 10.25% senior notes expected in August.

Allegheny Energy Supply is the subsidiary of Greensburg, Pa.,-based Allegheny Energy Inc. that owns and operates electric generating facilities.

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