Allegheny Energy Supply, a subsidiary of Allegheny Energy, has rolled three 364-day credit facilities totaling $810 million into one $965 million revolving credit facility. The company secured the three separate facilities last year as needed to support its growth and acquisition strategy, said Kevin Warchol, assistant treasurer. The company chose to consolidate the credits and cover its liquidity needs with one facility for administration purposes as well as the ease in having one set of covenants to abide by, explained Warchol.
The new credit comprises a $386 million, three-year revolver and a $579 million, 364-day revolver. The company assessed its liquidity needs and determined that it wanted to increase its liquidity slightly, said Warchol, explaining why the company upped the total credit size. Warchol noted that the company picked up a multi-year credit in addition to its 364-day commitment. "It's the satisfaction of having a three-year commitment," he answered to a question regarding the advantages of the new facility. The company was attracted to the flexibility of the 364-day tranche, but also the ease from an administrative perspective of having the three-year tranche in place. Warchol would not comment on pricing, but said that it was in line with current market pricing.
The new facility allows for letter of credit availability and commercial paper backup. Salomon Smith Barney and Bank One are the co-leads and co-book arrangers for the new deal. Warchol said the banks were a part of the company's relationship bank group, but declined to elaborate on their position in the former facilities.