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Project Paper Draws Interest

Buzz around project names continued last week as CoBank reportedly put up a $60 million piece of Teco Energy. CoBank officials did not return repeated calls.

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Buzz around project names continued last week as CoBank reportedly put up a $60 million piece of Teco Energy. CoBank officials did not return repeated calls. A trader said the paper was offered at 65 on a net-back basis. He explained this is equivalent to 71, whereas the market is 66-68. A sale had not gone through by press time.

The name traded around the 65 range two weeks ago. There was some speculation that Carl Icahn'sHigh River Limited Partners could be acquiring pieces of the debt, though officials close to Icahn said the billionaire financier has not bought the name in recent months (LMW, 12/6).

Boston Generating (Exelon Boston) also traded actively in the 99-101 context. Two weeks ago a $75 million block traded through Bear Stearns in the 98 1/2 level. Officials at Bear Stearns did not return calls. "All this project finance [paper] is starting to trade now that it's almost year-end, so as the buzz goes around that it's trading the bids start to go up," a trader said.

The bank debt for Liberty Electric PA, sponsor of Reliant Energy's Pennsylvania power station, also was active around the high 90s. A piece was sold around 98 1/4. The name was later quoted around 101, another trader stated. A spokeswoman said Reliant acquired the Liberty plant in February 2002 as part of its Orion Power Holdings. Liberty began operations in May 2002 and committed its output to a subsidiary of PG&E Corp. Last year, after PG&E filed for bankruptcy, Liberty defaulted under its $262 million project financing debt. "We are working with the lenders right now and expect to transfer the ownership to the lenders by the end of this year," she said

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