Midwest Generation $900 million credit facility to launch Monday

By Sara Rosenberg

New York, April 2 - Midwest Generation LLC is scheduled to hold a bank meeting on Monday for a proposed $900 million credit facility, according to a market source. Citigroup, Credit Suisse First Boston, JPMorgan and Lehman Brothers are the lead banks on the deal.

The facility consists of a $700 million first priority secured institutional term loan and a $200 million revolver, according to the source, who added that price talk is not yet available on the deal.

Security for the term loan and the revolver is a first lien on substantially all of the coal fired generating plants owned by Midwest Generation.

Proceeds from the term loan, combined with proceeds from the proposed issuance of $1 billion second priority senior secured notes, will be used to refinance $693 million of debt due in December owed by its direct parent, Edison Mission Midwest Holdings Co., and to make termination payments under the Collins Station lease in the amount of about $970 million, according to a company news release.

Although the company plans on raising $1.7 billion through the term loan and bonds, the final principal amount of notes and loans and other terms of the notes will be determined by market conditions, the release added.

The revolver will be used for working capital and replace the existing working capital facility under which nothing is currently drawn.

Midwest Generation is a Chicago electric company.

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