Astoria Energy postpones launch; NRG books filling up; Hallmark ups second-lien spread

By Sara Rosenberg

New York, Jan. 6 - Astoria Energy, which was previously called U.S. Power Generating Co. LLC, pushed off its bank meeting by about one week as the syndicate and the company decided that they needed a bit more time to get everything in order for the launch.

Meanwhile, NRG Energy Inc. has been attracting a lot of positive investor attention as commitments have been steadily coming in to the books since the deal's formal launch took place on Thursday.

And, Hallmark Entertainment flexed pricing higher on its second-lien term loan by 50 basis points, while leaving pricing on all other tranches contained in the credit facility unchanged.

Astoria Energy has decided to push off the bank meeting for its approximately $900 million credit facility to Jan. 17 from Jan. 9 in order to gain a bit more time to get things ready for the launch, according to a market source.

The original timing for Astoria's deal had been floating around the market since before the holiday break just to get the deal out there and put it on investors' radars, but as the date was fast approaching, those close to the deal realized it wasn't quite ready to launch, the source explained.

The facility, as outlined in a commitment letter, consists of a $50 million revolver, a $120 million synthetic letter-of-credit facility, a $430 million term loan and a $300 million second-lien term loan.

However, this structure is expected to undergo some tweaks prior to launch, with firm details anticipated to be announced closer to the bank meeting.

Morgan Stanley and Goldman Sachs are the lead banks on the deal, with Morgan Stanley the left lead.

Proceeds from the credit facility will be used to back the purchase of some Reliant Energy Inc. power plants.

In early October, U.S. Power, a New York-based electricity generating asset acquisition company, and private equity firm Madison Dearborn Partners LLC announced that they would be acquiring three New York City power plants from Reliant - the Astoria, Gowanus and Narrows plants.

NRG nets orders

Syndication on NRG Energy's $5.2 billion senior secured credit facility (Ba2/BB-) is said to be off to a nice start since Thursday's bank meeting took place, as commitments "have been flying in" from investors, a market source told Prospect News.

"It's going great. Been getting tons of orders," the source added.

In addition, prior to the bank meeting taking place, a number of institutions signed on to the deal in co-manager and senior managing agent roles.

Co-managers on the deal include Lehman Brothers, Goldman Sachs, Credit Suisse First Boston, Bank of America, Deutsche Bank and Merrill Lynch.

Senior managing agents on the deal include CIT, Commerce Bank, General Electric Capital Corp., ING and Royal Bank of Scotland.

And, as has previously been reported, Morgan Stanley and Citigroup are joint lead arrangers and joint bookrunners on the deal, with Morgan Stanley on the left.

NRG's facility consists of a $1 billion five-year revolver talked at Libor plus 200 basis points with a 50 basis point undrawn fee, a $1 billion five-year synthetic letter-of-credit facility talked at Libor plus 225 basis points and a $3.2 billion seven-year term loan B talked at Libor plus 225 basis points.

Prior to launching, the syndicate decided to increase the revolver tranche size to $1 billion from the $600 million amount that was given in the company's commitment letter, resulting in a total deal size of $5.2 billion as opposed to $4.8 billion as was originally expected.

Proceeds from the credit facility will be used to help finance NRG's acquisition of Texas Genco LLC. The company also plans on selling $3.6 billion of senior unsecured notes, approximately $1 billion of common stock and $500 million of mandatory convertible preferred stock for acquisition financing.

Princeton, N.J.-based energy company, NRG, announced in early October that it will pay $5.8 billion for Houston-based Texas Genco, $4 billion in cash and $1.8 billion in NRG shares representing about 25% of the combined company's stock.

Hart-Scott-Rodino clearance and Federal Energy Regulatory Commission approval for the acquisition has already been received, resulting in a target closing timeframe of early February. The deal is still subject to final approval from the Nuclear Regulatory Commission.

Hallmark second-lien flexes up

Hallmark Entertainment increased pricing on its $50 million 61/2-year second-lien term loan to Libor plus 650 basis points from Libor plus 600 basis points, according to a market source.

Pricing on the company's $90 million five-year revolver and $75 million five-year term loan A was left unchanged at Libor plus 225 basis points, and pricing on the company's $215 million six-year term loan B was left unchanged at Libor plus 250 basis points, the source added.

JPMorgan is the lead bank on the $430 million credit facility that will be used for LBO financing.

Hallmark Entertainment is a diversified entertainment company.

Secondary levels continue up

Overall it was a good day for the secondary loan market as levels ticked upward by about another eighth of a point amid a good flow of trading activity, according to a trader.

"It's piggy back from yesterday. High yield is up again. Overall [there is a] positive tone. [There is] good two-way flow. Plenty of guys have cash to put to work despite the building calendar so things keep trucking higher," the trader said.

"It will be interesting to see what happens at the end of the month when all of these billion dollar deals break for trading," the trader added.

Over the past few days, most traders have said that the overall secondary loan market tone has been a good one. And, most recently, this past Thursday, sources put the market up by at least an eighth of a point and possibly even as much as a quarter of a point.

Per-Se closes

In follow-up news, Per-Se Technologies Inc. closed on its $485 million credit facility as it completed its acquisition of NDCHealth Corp.

The loan (B1/B+) includes a $50 million five-year revolver at Libor plus 150 to 250 basis points, depending on performance, and a $435 million seven-year term loan B at Libor plus 225 basis points.

The Alpharetta, Ga., provider of connective health care solutions to physicians and hospitals had no revolver borrowings outstanding at closing.

© 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.