A $10 million auction of TECO-Panda bank debt failed last week after bids for the piece came in short of the price the seller wanted. TECO-Panda bank debt has been quoted around the 70s level for some time. Interest in the project financing paper tends to pick up as the overall market slows down, traders said.
The TECO-Panda paper is a part of larger bank financing that was put in place during the summer of 2001 to support the construction and operation of the Union and Gila River power stations. The effort was a joint venture between TECO Wholesale Generation, known at the time as TECO Power Services Corp., and Panda Energy International. The original financing included $1.675 billion of non-recourse debt and $500 million in equity bridge loans. The bridge loans have since been repaid.
TECO bought out Panda's interest in the joint-venture in 2003. TECO is now working to transfer the ownership of these plants back to the lending group in exchange for forgiveness of the debt. Calls to Gordon Gillette, TECO's cfo, were referred to a spokeswoman who did not return calls by press time.