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Mirant late last week bagged bank approval to remove default provisions from its loan covenants. The move allows the Atlanta-based IPP to focus on restructuring its debt, says Lloyd Avram, a spokesman. The company isn't commenting on what debt is being restructured, but most pressingly it has a $1.25 billion loan maturing in July. The covenant changes remove the potential for default and afford the company time to prepare a restructuring plan, which bankers say should be in place by the end of next month (PFR, 4/21).

Bonds Issue Date Maturity Issuer Amount ($ mil) Offer Price Type of Security Coupon (%) Spread to Benchmark Moody's S&P Bookrunner(s) 4/10/03 4/15/33 Georgia Power Co (Southern Co) 150 100 Sr Secured Nts 5.9 97 A2 A Bank of America 4/11/03 4/15/23 Georgia Power Co (Southern Co) 100 99.976 Notes 5.75 76 A2 A Bank One/Goldman 4/15/03 4/23/07 Alabama Power (Southern Co) 195 100 Sr Unsecurd Nts Floats - A2 A Lehman 4/15/03 10/25/04 Energie Baden-Wuerttemberg 60.3 100 MTNs Floats - A2 A+ BNP Paribas 4/15/03 5/1/08 Ohio Edison 175 99.576 Notes 4 120 Baa2 BBB- Barclays/Salomon 4/15/03 5/1/15 Ohio Edison 150 99.954 Notes 5.45 149 Baa2 BBB- Barclays/Salomon M&A Date Announced Date Effective Target Target Advisors Acquiror Name Acquiror Advisors Deal Value ($mil) 4/10/03 - Hubei Changyuan Elec Power - China Guodian(Group)Corp - - 4/11/03 - Texas Gas Transmission Corp - Lehman Brothers - - Citigroup - Loews Pipeline Holding Corp - - - 1,045.00 4/11/03 - Ddgaz - Investor Group - 9.902 4/12/03 4/12/03 Moyle Interconnector - Moyle Holding - 192.557 4/15/03 4/15/03 Enron Teesside Operations Ltd - SembCorp Utilities Pte - 136.878 Source: Thomson Financial Securities Data Company. For more information, call Rich Peterson at (973) 645-9701.

Merrill Lynch has relaunched an energy trading operation in New York, two years after selling its Global Energy Markets (GEM) business to Allegheny Energy, and has hired a pair of Allegheny officials to run the new desk. Kuljinder Chase, head of energy trading at Allegheny, re-joined Merrill on Monday as head of the natural gas and oil trading business. Jake Goldberg, a natural gas options trader at Allegheny, will join as head of natural gas trading. Goldberg could not be reached. Jessica Oppenheim, a Merrill spokeswoman in New York, declined comment.

Trafigura Power & Gas has hiredRon Neal, a former managing director and head of commodity structuring at Bank of America in New York, to head up structuring in London. The hire sees Neal reunited with David Mooney, BofA's former global head of commodities, who joined Trafigura this spring to head up the commodity trading concern's push into power and gas. They also previously worked together at Citibank, say market watchers.

TECO Energy has tapped Merrill Lynch for a $350 million unsecured loan that has the unusual wrinkle of setting the base loan pricing via the company's bonds, according to market officials. The 18-month facility, which is fully underwritten by Merrill, is slated for a standby facility to refinance a bank facility falling due in November, and forms part of a TECO plan to generate cash and refocus on its utility business. Calls to Mark Kane, head of investor relations in Tampa, Fla., were not returned by press time.

Trans-Elect's pending acquisition of Illinois Power's high-voltage electric transmission network is being delayed to the third quarter as it needs to rework its proposed rate structure on the grid, says Bernie Schroeder, president and coo at the acquisitive independent North American transmission company. The acquistion and its related financing originally was slated to close by the end of this quarter. The rate restructuring is aimed at easing the regulatory approval process, after the Federal Regulatory Energy Commission said an initial rate suggestion would probably require time-consuming public hearings.

Babcock & Brown, a privately owned merchant banking boutique, is holding talks with Duke Energy International about acquiring or investing in its sole European generation asset, a cogeneration facility in northern France. Officials at B&B in London confirm it has passed its eyes over the 103 MW Compagnie Thermiquedu Rougvray combined heat and power plant near Rouen, Normandy, but declined comment on how the talks with Duke were progressing. One market watcher notes an initial period of exclusivity for B&B to sew up the deal expired last Wednesday. Officials at Duke declined to comment.

LG&E Power Inc. (LPI), the unregulated generation company of LG&E Energy Corp., is looking to sell its mainly U.S. generation portfolio, according to a preliminary offering document obtained by PFR. The package includes LPI's 50% ownership in the 550 MW Gregory Power plant in Gregory, Texas, as well as wind and coal-fired facilities in North Carolina, California and Spain. Calls to Doug Bennett, a spokesman in Kentucky, were not returned by press time. Gareth Wynn, v.p.-U.S. and U.K. corporate affairs at LPI's parent company E.on in Dusseldorf, declined comment.

Dominion has launched a novel $1.25 billion loan that marks the first time a widely syndicated facility has incorporated pricing referenced against the performance of the borrower's bonds. Bankers say the structure--known as relative value pricing--could fundamentally change the loan market if enough borrowers agree to it, or lenders demand they use it. "The general perception among banks is that bank loans don't pay. This would get loan returns more closely linked to the higher bondholder returns," says one lender.

FPL Energy is around a month away from launching its long-awaited non-recourse construction loan, and lenders say the deal appears more certain than before as ANZ Investment Bank and Credit Suisse First Boston have signed up for lead arranger slots alongside joint bookrunners Bank of Nova Scotia and Royal Bank of Scotland. The financing, which has been in gestation for over a year (PFR, 5/6), will be for $400 million and covers two plants, rather than the originally planned four, according to an official close to the deal. Pricing, maturity and leverage could not be determined, but one banker describes the structure as conservative with strong debt-service coverage ratios.