Credit Suisse First Boston will look to arrange a $600 million financing package to back K-Road Ventures' 3 GW purchase of Exelon Boston Generating facilities, according to Power Finance & Risk, an LMW sister publication. The William Kriegle-led venture is expected to complete the deal, which is still pending Federal Regulatory Energy Commission approval, in the next few months, and will start to hammer out a finance package via CSFB in July, said bankers following the deal. CSFB officials declined to comment as did officials at Kriegle's shop. Calls to BNP were not returned.
Although details have not been finalized, expectations are that about $800 million of the $1.4 billion in the plants' debt will be converted into equity and about $600 million could be refinanced with at least a two-lien structure, including a $125 million working capital revolver. The plant is owned by some 44 hedge fund groups including biggies Citadel, Cargill, Farallon Capital Management, and GLG Partners, who hold own to the debt associated with the plant. Officials at the hedge funds either declined to comment or did not return messages requesting comment.
The $125 million revolver likely will consist of a $75 million letter of credit facility and a $50 million line of credit to support the plant's operations, including contracted fuel costs, bankers said. The bankers emphasized that none of the funding plans have been cemented and given the number of players still in the mix the structure could be tweaked to appease the debt participants. "It's really a case of having a thousand cooks in the kitchen who all have varying agendas," says one banker.
The K-Road venture, founded by Kriegle, received approval from the BNP Paribas-led creditor group and will be expected to manage and operate the Exelon-developed plants. The Boston portfolio includes Mystic 7, 8 and 9, Fore River, all 832 MW gas-fired plants, along with Mystic 7, a 560 MW oil and gas-fired plant.
