Goldman Sachsand WestLB have launched syndication of a "B" loan for Stark Investmentsand Sequent Power Partners, holding a bank meeting at the Westin New York at Times Square. The joint bookrunners are aiming to wrap the deal, which funds the planned purchase of the 730 MW Wolf Hollow plant in Hood County, Texas, by year-end. The banks are hoping to draw more than 100 participants. Calls to Goldman and WestLB officials were not returned. Officials at Stark and Sequent also did not return calls.
The financing package comprises a six-year, $130 million term loan "B," a $110 million synthetic letter of credit with a six-and-a-half year tenor and a seven-year, $50 million working capital revolver. Pricing on the term loan "B" portion is expected to be in the range of LIBOR plus 2%. The revolver likely will be priced about 25 basis points more than the term loan, while the letter of credit will be set in the neighborhood of LIBOR plus 4%, said one hedge fund executive who is eyeing the offering. Pricing and terms may still change as they hinge on demand, the exec said.
About 95% of the combined-cycle, natural-gas fired plant is contracted by Goldman subsidiary J. Aron & Co., which has about half of the capacity for five years. Exelonis in two years into a 20-year power purchase agreement. Terms of those contracts could not be learned. KBC Bankhelped originate the construction loan for the gas-fired combined cycle facility for AES, which handed the keys back to lenders when the plant was completed last year.