Pieces of Dynegy's new loan for its Dynegy Holdings subsidiary were trading last week, with the new $1.1 billion revolver and the $200 million "A" term loan moving as a pro rata piece in the 94 1/2 96 context. No trades could be confirmed, however, for the company's new "B" piece. The market for the "B" tranche was quoted in the 93 95 range. The "B" loan only has a second priority lien on Dynegy Holdings' assets, compared to the pro rata portion, which has a first priority lien. While the pro rata replaces Dynegy Holdings' existing $900 million and $400 million unsecured revolvers, the "B" loan replaces a communications lease.
The lease agreement was tied to Dynegy's communications group and was backed by technology assets that are being sold along with the communications group to 360networks. "It was our intention to keep the lease component and fold it in the refinancing," said a company spokesman, noting that the rollup freed up those assets. All the facilities are priced at LIBOR plus 43/4%. The maturity of the pro rata exposure has been extended from this spring to February 2005. The maturity for the new "B" piece remains unchanged. Citigroup, Bank of America and Bank One lead the re-worked deal.