Reliant Loan Bids Under Par On Bad Numbers

Reliant Energy posted bad third quarter earnings last week, prompting bids on its term loan to come in under par.

  • 04 Nov 2005
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Reliant Energy posted bad third quarter earnings last week, prompting bids on its term loan to come in under par. The B1 tranche of the term loan dipped to 99 7/8 from 100 3/8, while the B2 tranche fell to par 5/8 from 101. Its notes also fell. The 6.75% '14 bonds fell three points to 90, while its 9.5% '13 bonds fell four points to 102. A trader said the B2 tranche of the term loan usually trades better than the B1 tranche because it is not pre-payable when the company sells assets. Both tranches fell on news that the term "B" loan would be paid down with most of the proceeds from the sale of its New York City power generation assets.

Reliant Energy reported a $267 million loss from continuing operations in the third quarter, compared with a $75 million income from continuing operations in the same period last year. The 2005 numbers include a $217 million after-tax charge from the settlement of California litigation, regulatory proceedings and investigations, and a $219 million net loss from unrealized energy derivatives.

  • 04 Nov 2005

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1 Bank of America Merrill Lynch (BAML) 6,415 22 12.84
2 Citi 5,781 17 11.57
3 BNP Paribas 3,530 14 7.06
4 Credit Suisse 2,783 8 5.57
5 Rabobank 2,633 4 5.27

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4 JPMorgan 51,967.93 167 6.99%
5 Credit Suisse 41,545.25 126 5.59%