Credit Suisse First Boston has launched retail syndication of the $822 million credit for PSEG Power, just as the bank wraps up syndication of the heavily cut Mirant deal, which closed last week. The PSEG loan consists of an $800 million four-year construction facility priced at 1 3/8% over LIBOR. Commitment fees are 3/8%. There is also a one-year $22 million letter of credit priced at LIBOR plus 7/8% with a 15 basis points commitment fee.
CSFB is the lead arranger, syndication agent and book runner. Bank of America is administration agent and Bank of Nova Scotia, documentation agent. Proceeds from the loan will finance the construction of an 850 MW combined-cycle gas-fired plant in Ohio and a 1,150 MW CCGT facility in Indiana, said a spokesman for PSEG. CSFB has also finally wrapped up syndication of the $2 billion credit for Atlanta-based energy giant Mirant. Originally set at $3.5 billion, the deal was cut firstly to $3 billion and had pricing flexed upwards.
One market source commented that the deals are chalk and cheese. PSEG is a tightly structured deal with very strong sponsor pull. The Mirant deal, however, was too loosely structured, he added. Co-arrangers were asked to commit $500 million tickets, and low upfront fees and pricing on the construction revolver--cut to $750 million--were not deemed attractive. Finance officials at Mirant did not return calls.