Credit Suisse First Boston is in the market with a $350 million refinancing package for Primary Energy earmarked for institutional investors, which will allow it to pay down project-level debt and also fund a $100 million dividend payment to its sponsor American Securities Capital Partners.
The seven-year deal refinances the debt associated with 444 MW of inside-the-fence generation assets in Northern Indiana that Primary Energy acquired last year. Calls to Bill Rockford, chief operating officer at Primary Energy in Oak Brook, Ill., were not returned and a spokesman at CSFB was unable to provide comment by press time.
Market officials said the loan is split between a $225 million amortizing first-lien term loan priced at LIBOR plus 6% and a $125 million, bullet-maturity second-lien term loan, priced at LIBOR plus 9% with a 2% LIBOR floor. The first-lien term loan was increased from $175 million and the second-lien term loan was decreased from $200 million, but the reason for the changes could not be determined. The deal hit the market May 6.
GE Capital provided $60 million of new project-level debt for three of the six plants when they were acquired, and Primary Energy assumed $180 million in debt on the remaining plants. The balance of the acquisition ticket came in equity. The plants operate under long-term contracts with major industrial players United States Steel, Ispat Inland and International Steel Group along Northern Indiana's Steel Coast.