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| Astoria Energy Site |
Astoria Energy has tapped Calyon to help it refinance a $700 million highly priced B-loan, which it obtained earlier this year to fund the construction of a 500 MW gas-fired plant in Queens, New York. The existing debt, led by Credit Suisse First Boston, was split between a $500 million first-lien piece priced at 525 basis points over LIBOR, and a $200 million second lien loan priced at a 875 basis points spread (PFR, 4/5).That rich spread is believed to be behind the Astoria move to try and refinance at a lower rate. One banker familiar with the deal says there is a call premium of 101-102 if it is refinanced early. Calls to officials at Astoria were directed to Christopher Grath, a spokesman, who was unable to comment by press time.Francois Coussot, managing director at Calyon, declined to comment and officials at CSFB did not return calls.
The type of debt the subsidiary of Concord, Mass.-based SCS Energy is looking for could not be determined. Originally, the company wanted to obtain a bank deal before it chose the B loan route. Although the B-loan is pricier, a bank deal can be more restrictive in respect to terms and covenants.
The B loan was met with a skeptical response from traditional financiers, who questioned several aspects of the project, including whether the offtake contract was weighted too much in favor of the utility and the ability of the developer to meet the deadlines set out in the contract (PFR, 2/9). It could not be determined how far along the company is in its construction of the power plant, which is scheduled to be up and running by 2006.
