Credit Suisse First Boston and Lehman Brothers are getting the ball rolling on a $2.3 billion exit and recapitalization financing package for bankrupt NRG Energy. A banker said the deal would most likely emerge at the end of this year or in the first quarter of 2004, depending on when reorganization approvals materialize. The financing commitment from CSFB and Lehman will expire at the end of the year, but can be extended through March 2004 if the company pays an extension fee. The company hopes to emerge on or before Dec.15.
The final structure and pricing has yet to be smoothed out, the banker said. But the loan will most likely include a $150-250 million asset-based revolver and $2 billion divided between an institutional loan and high-yield components, he said. The revolver would be for three years and the term loan would have a seven-year tenor. Pricing is expected to be in the neighborhood of LIBOR plus 23/4-3% for the tranches. A CSFB official declined to comment and a Lehman banker did not return calls. An NRG spokeswoman confirmed the financing.
NRG voluntarily filed for Chapter 11 last May in a move to restructure a $9.2 billion debt pile that includes several different types of debt. The Minneapolis-based energy company accumulated the debt after more than a decade of aggressive expansion into the unregulated power generation and trading space, reports state. As soon as NRG's debts are settled and the company has emerged from bankruptcy, it is expected that NRG will be completely independent from its parent Xcel Energy Corp.