A $250 million credit facility for InterGen Ltd. is set to clear the market with a novel pricing scheme that features a grid linked to Bechtel Enterprises Holdings' and Shell Generating's ownership in the company. Betchtel and Shell are equal partners in Intergen, and as either or both divest from InterGen, the spread rises accordingly. Georganne Proctor, cfo of Bechtel in San Francisco, said the company is not involved in any similarly structured financings with its other subsidiaries. "This structure is not duplicated anywhere else," she said, refusing further comment. Mark Takahashi, v.p. and treasurer of InterGen in Boston, did not return calls seeking comment. The credit, which was due to close as LMW went to press last Friday, is led by Credit Suisse First Boston, Deutsche Bank and Australia New Zealand Bank. Rival bankers said the structure is new. "I haven't seen something like that before. It sounds like it would be a smart thing," noted one banker. "To the extent that people derive comfort from these two large companies, the banks are willing to lend to InterGen."
Another rival industry lender concurred. "It sounds rather new," noted one rival banker. "It's probably guaranteed by those two parties. [Bechtel and Shell] guarantee the loan, and InterGen gets the financing as long as they stay put." Officials at CSFB, Deutsche Bank and ANZ did not return calls.
The spread has three levels. Pricing opens at 5/8% over LIBOR, with a facility fee of 1/4%. The second level jumps to 11/4% over LIBOR, with the final level at 13/4% over LIBOR. Corresponding divestiture levels could not be ascertained before press time.