The bank debt levels for ANP Funding, a subsidiary of International Power (IP) that owns and operates gas plants, have moved from 91-93 to 85-83. The IP subsidiary posted weaker than expected revenue two weeks ago with the market expecting losses of $4-5 million of EBITDA. It came down to minus $16 million, a trader said. An IP spokeswoman said earnings for the first quarter would be posted May12.
In 1996, IP entered into $1.376 billion of non-recourse debt to fund the construction of five gas plants in Texas and Massachusetts, according to distressed debt firm Imperial Capital. Approximately $480 million was paid down by the time the debt was restructured in 2004. It now consists of a $450 million "A" loan and a $399 million "B" loan led by Credit Suisse First Boston and Morgan Stanley.
Last year the North American assets incurred losses attributed to continued weakness in the Texas and New England markets. One of the primary reasons was the reduction in turnover principally due to the Hays plant in Texas being mothballed for 2004. Hays has since been reinstated, which is expected to slightly improve future earnings and cash flow.