Investors squeezed into the bank meeting last Thursday for financing to back the $5.2 billion acquisition of Texas Genco by NRG Energy. "People were hanging from the ceiling like bats," one portfolio manager said as leads Morgan Stanley and Citgroup detailed the credit. Deutsche Bank is also involved.
The deal consists of a five-year, $1 billion revolver; a seven-year, $3.2 billion term loan and a seven-year, $1 billion letter of credit facility. The term loan was priced at LIBOR plus 2 1/4%. Pricing on the revolver and letter of credit was not immediately known. "It's a big issue," the portfolio manager said. "It might take a few days to get digested. It has a very good asset base and both companies have good stories."
Jay Mandel, spokesman for NRG in Princeton, N.J., said this deal will also refinance debt.