PSEG Energy Holdings is refinancing a $200 million revolver via Union Bank of California, trimming capacity by $50 million. The $150 million five-year line is being pitched at LIBOR plus 1 3/4% and will replace a larger three-year line priced at 3% over LIBOR. Calls to James Ferland, president at parent Public Service Enterprise Group, were directed to a spokesman at the Newark, N.J., headquarters, who declined to comment.
Public Service Enterprise Group is winding down non-core businesses in preparation for its merger with Exelon Corp. so the $50 million decrease makes sense. "It's just not a core business for PSEG anymore," said Robert Hornick, senior director at Fitch Ratings in New York. Subsidiaries of PSEG Energy include PSEG Global, a power generation and distribution company, and PSEG Resources, an investor in energy-related financial transactions.
Syndication launched June 3 and commitments are due by the end of the month. Allied Irish Bank, Commerzbank, Erste Bank and Scotia Capital were among those considering participation. Officials at all banks declined to comment. The 125 basis point reduction in pricing reflects the reduction in size and the fact the market has become more amenable to financing energy.