NorthWestern Corp. has wiped out $25 million in bank debt with cash on hand in an effort to shore up its balance sheet. The Sioux Falls, S.D.-based energy holding company is planning additional redemptions this year, including $60 million of callable 7% first-mortgage bonds, which can be redeemed at the end of the third quarter, said CFO Brian Bird. NorthWestern emerged from bankruptcy earlier this year.
The energy outfit eliminated $25 million of its $100 million senior secured term loan "B," noted Bird. NorthWestern has trimmed debt by $33 million since the end of 2004, bringing total outstanding debt to about $795 million, he said. Its debt to capitalization ratio stands at about 52:48.
The loan, which is led by Deutsche Bank and Lehman Brothers last November, was priced at LIBOR plus 1 3/4% and matures in 2011. The debt is rated BB by Standard & Poor's and Ba1 by Moody's Investors Service. NorthWestern also plans to pay down the entire outstanding amount of its first-mortgage bonds, which were issued by Morgan Stanley in 1993. Those bonds mature in 2023 but are callable on May 31.