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GenOn Energy gets commitments for $750 million to $1 billion revolver
By Sara Rosenberg
New York, July 30 - GenOn Energy Inc. has received commitments for a $750 million to $1 billion five-year revolving credit facility in connection with its formation through the merger of Mirant Corp. and RRI Energy Inc., according to a 10-Q filed with the Securities and Exchange Commission on Friday.
As was previously reported, the company is also planning a $500 million term loan and $1.4 billion of senior unsecured notes.
The revolver commitments are subject to the $1.9 billion in term loan/notes financing and closing on the facility by Dec. 31.
Proceeds from the new debt will be used to refinance $1.2 billion of debt at Mirant and $650 million of debt at RRI.
The amount of the term loan and/or the notes may be reduced if RRI obtains certain consents from the holders of its 6.75% senior secured notes and/or certain bonds issued by the Pennsylvania Economic Development Financing Authority.
Under the terms of the merger agreement, Mirant stockholders will receive a fixed ratio of 2.835 shares of RRI Energy common stock for each share of Mirant common stock they own. Mirant stockholders will own about 54% of the equity of the combined company, and RRI Energy stockholders will own approximately 46%.
The combined cash balance of the companies as of Dec. 31, 2009 was $2.9 billion.
Closing is expected before the end of 2010, subject to stockholder approval, U.S. antitrust approval and approval by the Federal Energy Regulatory Commission. The closing is also subject to the refinancing.
GenOn will be a Houston-based power producer with about 24,700 megawatts of electric generating capacity and a pro forma market capitalization of $3.1 billion.
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