Credit Suisse and Goldman Sachs have launched the roughly $1.7 billion loan which will fund LS Power's acquisition of merchant assets from Duke Energy North America. Officials at the participating banks, which include WestLB and Morgan Stanley, either did not comment or return messages. Darpan Kapadia, managing director at LS Power in New York, did not return a call.
Morgan Stanley signed a PPA covering the DENA assets in late February, prompting Morgan to request a participating role in the deal. LS Power agreed to buy the assets, totaling about 6,300 MW of capacity, from Duke Energy in January for about $1.54 billion. It is expected to complete the acquisition this summer.
The loan package includes an $850 million, seven-year first-lien term loan with a $40 million delayed draw adjustment, a $450 million, seven-year first-lien synthetic letter of credit facility and a $100 million, five-year first-lien working capital facility. A $250 million, eight-year second-lien term loan rounds out the package. Pricing is set at LIBOR plus 2 1/2%s with a rating of BB- and B, for the first lien and second lien, respectively, by Standard & Poor's.