Texas Genco holds senior managing agent meeting for $2.2 billion credit facility

By Sara Rosenberg

New York, Oct. 12 - Texas Genco Holdings Inc. held a senior managing agent meeting on Tuesday to launch its proposed $2.2 billion credit facility, according to a market source. Goldman Sachs, Deutsche Bank, Morgan Stanley and Citigroup are lead banks on the deal, with Goldman listed on the left.

A bank meeting to launch the deal for retail syndication is scheduled to take place on Oct. 25.

The facility consists of a $325 million five-year revolver, a $200 million five-year letter-of-credit facility, a $900 million seven-year term loan B, a $475 million seven-year delayed-draw term loan B and a $300 million five-year "special" letter-of-credit facility, the source said.

Price talk on the tranches is expected to come out when ratings come out, the source added.

Proceeds, combined with proceeds from a proposed bond deal, will be used to help fund GC Power Acquisition LLC's acquisition of Texas Genco from CenterPoint Energy Inc. for about $3.65 billion in cash.

GC Power Acquisition LLC is a newly formed entity owned in equal parts by affiliates of The Blackstone Group, Hellman & Friedman LLC, Kohlberg Kravis Roberts & Co. LP and Texas Pacific Group.

The transaction, subject to customary regulatory approvals, will be accomplished in two steps. The first step, expected to be completed in the fourth quarter of 2004, involves Texas Genco's purchase of the 19% of its shares owned by the public for $47 per share, followed by GC Power Acquisition's purchase of a Texas Genco unit that will be formed to own its coal, lignite and gas-fired generation plants.

In the second step, which is expected to take place in the first quarter of 2005 following receipt of approval by the Nuclear Regulatory Commission, GC Power Acquisition will complete the acquisition of Texas Genco, the principal remaining asset of which will then be Texas Genco's interest in the South Texas Project nuclear facility.

Texas Genco is a Houston wholesale electric power generating company.

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