CIBC World Markets last Thursday launched syndication of a $325 million credit backing Kohlberg Kravis Roberts & Co. and Trimaran Capital Partners' ballpark $610 million all cash buyout of DTE Energy's International Transmission Co. (ITC) subsidiary. The fully underwritten credit includes $200 million at the operating company level divided into a $185 million "B" loan and a $15 million revolver. Price talk is in the LIBOR plus 21/ 2% range, said an official familiar with the situation. At the holding company level, there is a $125 million loan priced at LIBOR plus 31/ 2-4%, he added. A Trimaran spokeswoman did not return calls, while KKR and CIBC officials declined comment.
The acquisition plans were announced last December, but were under review by the Michigan Public Service Commission and required approval by the Federal Energy Regulatory Commission (FERC). ITC comprises a system of nearly 3,000 miles of high-voltage electric transmission lines and associated facilities and easements. DTE's Detroit Edison electric utility subsidiary was the former owner and operator of these assets. However, Michigan and federal regulators had been pushing utilities to relinquish control of their transmission businesses to step up competition among power generators and marketers.