GC Power Acquisition, the private equity-backed vehicle buying Texas Genco Holdings, will launch a $1.375 billion second-lien tranche next week, according to Power, Finance & Risk, an LMW sister publication. The latest financing comes on the heels of the $2.2 billon first-lien loan package joint lead arrangers Goldman Sachs and Morgan Stanley launched at the retail syndication level Nov. 19.
The $1.375 billion financing will either take the form of second-lien senior notes or loans, an official said. The note offering is rated B+/Ba3 by Moody's Investors Service and Standard & Poor's, respectively.
The $2.2 billion first-lien loan, which is open for commitments until Dec. 3, breaks down into a five-year $325 million revolver and seven-year $1.375 billion "B" loan, which includes a $475 million delayed-draw portion. The first-lien loan structure also includes a $200 million letter of credit facility and a $300 million special letter of credit, the official said, noting that Deutsche Bank and Goldman are syndicating the latter piece.
The "B" loan is being offered at LIBOR plus 2 1/2%, while the revolver and the $200 million letter of credit facility are priced at LIBOR plus 2 1/4%. The "B" loan has been heavily oversubscribed. A Goldman official declined comment. Deutsche Bank and Morgan Stanley bankers did not return calls. Calls to officials associated at the GC Power venture were not returned by press time. The private equity group behind the $3.65 billon acquisition comprises The Blackstone Group, Hellman & Friedman, Kohlberg Kravis Roberts & Co. and Texas Pacific Group. Due to pending regulatory approval of the Texas Genco nuclear assets, the $475 million delayed-draw loan should close in the first or second quarter next year.