Traders are speculating that price movements in TECO Energy's Union and Gila projects bank debt have been caused by Carl Icahn'sHigh River Limited Partners buying the paper, according to Power, Finance & Risk, an LMW sister publication. The debt has climbed from the 58-60 range since September, but last week the name popped to 69-71, according to Mark-It Partners/LoanX. Later in the week it dropped to 61-63.
A source close to the prominent investor said there has been no attempt to acquire TECO-Panda's bank debt in the past three months following a run up in the price. Several calls to Icahn's offices in Manhattan were not returned and High River officials declined to comment. Calls to officials at TECO were not returned.
Icahn is a logical investor for the TECO-Panda paper because he has an appetite for power generation assets, said observers. Also Icahn formed a joint venture with Dallas-based Panda Energy International, which originally helped develop and later sold the Union and Gila plants to TECO last year. The venture was initiated to take advantage of an oversupply of merchant assets but efforts to acquire plants have been stymied given the high prices.
The two troubled merchant facilities are laden with $1.4 billion in bank debt. TECO indicated that it would hand over the keys to senior creditors Citigroup and Société Générale earlier this year. Several calls to the lenders were not returned.
