Lehman Brothers and CIT Group have jointly underwritten a $165 million second-lien loan for Primary Energy Holdings that funds the acquisition of a combined 270 MW of gas-fired co-generation facilities from Reservoir Capital Group. The bank debt also recapitalizes six waste recovery projects at steel manufacturing facilities, said one official. A call to Mark Hall, senior v.p. at Primary Energy was not returned by press time.
The second-lien loan is priced at LIBOR plus 6%, said an official. The transaction is expected to close by year-end. A CIT banker declined to comment and calls to Lehman bankers were not returned. Earlier this year, Primary Energy pulled a planned $375 million "B" loan led by Credit Suisse First Boston that was intended to refinance cogeneration assets tied to steel mills in Northern Indiana. The seven-year loan was shelved after failing to land the pricing and structure the Oak Brook, Ill.-based developer wanted.