Credit Suisse First Boston, Goldman Sachs and WestLB will arrange a $1.6 billion acquisition financing package on behalf of LS Power for its acquisition of Duke Energy‘s 6.2 GW merchant portfolio. The financing package is expected to consist of a B loan, synthetic letter of credit facility and a revolver. While the breakdown of the financing could not be determined, the pricing will start in the range of 200 basis points over LIBOR, one banker says, noting that pricing is subject to change due to ratings.
LS Power is still awaiting regulatory approval and as a result the financing will not be wrapped for another three to four months, officials say. Duke kicked off the sale of its assets late September (PFR, 09/26). Officials at WestLB and CSFB declined to comment and calls to Goldman were not returned.
WestLB acted as sole financial advisor for LS Power, while CSFB and Goldman arranged staple financing said to be in the $800 million range, which will be included in the overall acquisition financing.
East Brunswick, N.J.-based LS Power agreed to pay about $1.54 billion for Charlotte, N.C.-based Duke’s Duke Energy North America generation assets outside the Midwest. WestLB acted as the sole financial advisor to LS Power on the sale. Darpan Kapadia, managing director at LS Power in New York, would not comment.