Covanta Energy is looking to wrap syndication of the first lien portion of its $1.14 billion loan package this week. Leads Goldman Sachs and Credit Suisse First Boston are expecting to draw in about six banks and 50 institutional players, according to industry officials.
The first lien consists of a six-year, $100 million revolver, a seven-year, $340 million pre-funded letter of credit facility and a seven-year, $250 million "B" loan. There is also an eight-year, $450 million second lien portion. Pricing on the first lien is around LIBOR plus 3% but has not yet been set, one banker involved said. The second-lien is priced at LIBOR plus 5%.
Calls to Craig Abolt, cfo at parent company Danielson Holding Corp. in Fairfield, N.J., were not returned. The Covanta loan backs the acquisition of American Ref-Fuel Holdings Corp. (ARC) from DLJ Merchant Banking Partners and AIG Highstar Capital for approximately $2 billion by Danielson. The company is in turn owned by distressed funds Third Avenue Value Fund, D.E. Shaw Laminar Portfolios and SZ Investments.
The combined company will own or operate 31 waste-to-energy facilities across 15 states that will have the capacity to dispose of 45,000 tons of trash per day and generate almost 1,200 megawatts of renewable energy. Officials at Goldman declined to comment while financiers at CSFB did not return calls.