Scotia Capital and The Royal Bank of Scotland launched syndication last Tuesday for a $400 million construction facility that transforms into a term loan for FPL Energy. The deal will back two gas-fired projects in Alabama and Pennsylvania, a banker explained. All of the credit is expected to be drawn through the end of construction, another banker added, noting that the projects should be finished in a year. At the end of construction, the revolving credit will turn into a three-and-a-half-year term loan and pricing will step up from LIBOR plus 13/4% as a revolver to LIBOR plus 2% as a term loan.
The first banker said FPL equity has been used to finance the construction until now. Australia and New Zealand Banking Group (ANZ) and Credit Suisse First Boston were announced as arrangers at the bank meeting, joining the bookrunners Scotia and RBS, he said.
The leads are still shopping arranger level commitments, the second banker noted. Both bankers declined to disclose ANZ's and CSFB's ticket sizes. Up-front fees for retail commitments break down to 75 basis points for $25 million tickets and 50 basis points for $15 million tickets. There is also a $40 million tier invite, both bankers said, declining to state the tier's specific up-front fees. About a handful of lenders were invited at this level, they noted. An FPL Energy spokesman could not be reached by press time. Scotia and RBS officials declined to comment, while ANZ and CSFB bankers did not return calls.