Reliant Resources bank debt was a touch stronger with its term loan quoted in the 961/4-971/2 range after the company tapped an escrow account to pay down $917 million of bank debt under its March 2003 credit facility. About $784 million of the proceeds were directed to pay down the company's term loans and about $133 million repaid the outstanding amount on the company's revolver.
Reliant also canceled a $300 million senior priority revolver. This revolver was set to mature on the earlier date of Reliant's possible acquisition of CenterPoint's holdings of the common stock of Texas Genco or Dec. 15, 2004.
The escrow account had been established to fund Reliant's option to purchase CenterPoint's stake in Texas Genco. The credit agreement also allowed the company to hold the funds in the account for a future purchase of Texas Genco shares until the earlier of Sept. 15, 2004 or the date that CenterPoint sold more than 20% of the outstanding common stock of Texas Genco. Afterwards, the company would have been required to use the funds to repay its March 2003 credit facility.
Reliant's credit has also been repaid using proceeds from a $1.1 billion note issue and approximately $207 million from a recent asset sale since March. The company now has a $2.1 billion revolver, about $400 million outstanding on its "A" loan and approximately $1.4 billion on its "B" piece. "In a period of nine months, the banks have received about $2 billion in pay downs," said Dennis Barber, director investor relations for Reliant.