Reliant Resources ' term loan has been inching up to the 96 1Ž 4-96 3Ž 4level over the last week on news that the company received clearance from the Dutch competition authority for the sale of its European energy operations to Nuon , the Netherlands-based electricity distributor. Reliant's revolver has also been trading in the 91-92 range. Reliant expects to receive about $1.3 billion in cash proceeds upon completion of the sale. Reliant signed the agreement for the sale last February.
Reliant has stated that proceeds will be directed to pay down a E 600 million bank loan under its Reliant Energy Capital entity. Approximately $200 million of the proceeds will then be directed to prepay debt under credit facilities the company completed in March 2003. Reliant's March 2003 credit includes a $2.1 billion senior secured revolver, a $921 million senior secured term loan and a $2.91 billion senior secured term loan. David Barber , director of investor relations for Reliant, noted that the proceeds directed to the March 2003 credit will be distributed on a pro rata basis across the "A" and the "B" loans.