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Bank Sells Off Entegra Exposure

A European bank sold off $20 million of bank debt of Entegra Group in an auction last week, according to traders.

A European bank sold off $20 million of bank debt of Entegra Group in an auction last week, according to traders. The winning bid was 108. The institution that won the auction could not be determined. Active trading on the name pushed up Entegra's letter of credit term loan five points to 109. Joff Mitchell, managing director of Kroll Zolfo Cooper, a restructuring advisor to Entegra, speculated that the bank that sold off its exposure had achieved the kind of recovery rate it wanted to obtain on the debt. Entegra's bank debt has been trading above par for several months. He added that several banks have recently sold their exposure to the name and that hedge funds have been replacing banks as investors in the debt.

As part of its debt restructuring, Entegra is increasing the size of its LOC facility to $350 million from $200 million. Citigroup leads the deal and Mitchell said the bank group hopes to finalize the transaction by April. There are also proposals to restructure $1.325 billion of Entegra's term debt, which is split into two tranches. Entegra is restructuring its debt linked to two of its facilities in the U.S., Gila River Power Station and the Union Power Station. The power company ­ formerly known as TECO-Panda ­ was a joint venture between TECO Wholesale Generation, known at the time as TECO Power Services Corp., and Panda Energy International. The original financing included $1.675 billion of non-recourse debt and $500 million in equity bridge loans.

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