Credit Suisse First Boston is pushing Astoria Energy to honor an agreement the bank said gives it the right to lead a refinancing for the developer's 1GW project in Queens, according to Power Finance & Risk, an LMW sister publication. The investment bank led a $725 million construction loan for the developer last year, but a new deal which will pay off the "B" loan is being led by Calyon (LMW, 3/21), and the French firm is expected to pocket $15-20 million for the assignment.
The refinancing clause was outlined in the original engagement letter, according to CSFB. The two have been in charged discussions over the past month with Astoria claiming the "B" loan retooling does not qualify as a refinancing event. James Croyle, president of Astoria in Concord, Mass., declined to confirm the dispute or talk about details of the agreement. "Never in my 63 years have I ever violated the terms of any contracts," he said.
It is unclear how the dispute may be resolved. Jean-Marie McFadden, spokeswoman at CSFB in New York, declined to comment.
The exact wording in the engagement letter could not be determined. Industry officials say such a clause can benefit both parties. For a less well-known sponsor it provides assurance that they will have a major investment bank backing their projects, while the banks can lock up future business with the client. Calls to Francois Coussot, managing director at Calyon, were not returned.