Coleto Creek is looking to amend its $460 million credit facility to pay a $50 million special dividend. The amendment will increase debt by up to $45 million and allow cash trapped at the project to go toward the dividend. Coleto is a subsidiary of Sempra Energy and Carlyle/Riverstone and was bought last March for $430 million from American Electric Power. It is a 632-megawatt (MW) coal-fired power plant based in Texas.
Citigroup, Goldman Sachs and JPMorgan lead the bank debt, which was originally syndicated last summer. The existing $60 million revolver will remain unchanged with pricing of LIBOR plus 2 1/2%. The "B" loan, which is currently $193 million and priced at LIBOR plus 2 1/4%, will be increased to $228 million and pricing will be cut to 1 3/4% over LIBOR. A $47 million letter of credit facility will be increased by $10 million and the pricing is also being cut 50 basis points to LIBOR plus 1 3/4%. A $150 million "C" loan is being repriced from LIBOR plus 3 1/2% to LIBOR plus 3 1/4%. There is also 101 soft call protection on the "C" loan.
Moody's Investors Service has put the bank debt ratings on review for downgrade. The first lien is rated Ba2 and the second lien Ba3. Calls to company officials were not returned.