Unproven turbines could restrict the amount of cash garnered by Citibank and Société Générale for the $1.7 billion non-recourse loan for project sponsor PG&E National Energy Group. The banks are looking for an extra $625 million during retail syndication after commitments of $1.075 billion came in before Christmas. One banker commented on the fat fees on offer, with $75 million receiving 1 1/4 %. Pricing is said to be LIBOR plus 1 3/4 %. "But the Siemen turbines are not 100% proven and this could be a problem," he added. Increasing exposure to the power industry is not assisting either, the banker said. Calls to Chris Beale, head of project finance for Citibank, were not returned.
J.P. Morgan, ABN AMRO, and Royal Bank of Scotland have signed $150 million tickets and Canada's Export Development Corp. committed $100 million. Co-arranger Credit Lyonnais signed on for $75 million and TD Securities, DZ Bank and Barclays Capital pledged $50 million. NEG will use the proceeds to refinance the 360MW Millennium project in Massachusetts and develop three new plants.