NRG Energy is looking for a $2 billion construction and acquisition revolver and will start taking pitches from banks early next month. Brian Bird, v.p. and treasurer, told Power Finance & Risk, an LMW sister publication, that the credit will be used primarily to boost the independent power producers' U.S. generating portfolio outside of California. The company's roster of lead banks includes J.P. Morgan Chase, Credit Suisse First Boston, ABN-Amro and Citibank.
Some of the planned bank revolver proceeds will be used to acquire assets from LS Power that are either in development or at the construction stage, with its partner Dynegy (PFR, 11/20). It also will use proceeds to acquire some 1,330 MW of generation capacity from Sierra Pacific Resources, 800 MW of generation assets from Conectiv and 1,051 MW of generation assets from Wisconsin Energy.
In a recent conference call Len Bluhm, cfo, told analysts NRG intends to reduce the weighting of California assets in its generation portfolio to 7% from 11% by year-end. The IPP is holding off from building new power plants in California, pending how the crisis pans out.
Along with the $2 billion revolver, NRG also plans to renew a $500 million short-term credit for an additional year, said Bluhm. It has also filed with the Securities and Exchange Commission to sell $1.6 billion in convertibles and preferred securities. According to Bluhm, the company will take out the loans and tap the capital market so it can free up the credit, which will allow NRG Energy to reuse the revolver on continuous basis.