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Tulsa, Okla.-based Williams is slowly edging toward meeting a reduced $1.2 billion target for a new revolver ahead of a Tuesday deadline when its current facility expires. Bankers say the deal, which was launched early June with a $1.8 billion target, had commitments in the range of $830-950 million as of last Thursday. The difficult syndication process--which was expected to be tough from the outset (PFR, 7/9)--has recently prompted Williams to divide the loan into four tranches that sit closer to operating companies, rather than the holding company, to make the security more attractive to potential lenders. Kelly Swan, a spokesman at Williams, says negotiations with its lenders are ongoing and an increase in expected asset sales prompted it to reduce the size of the revolver.

* Dynegy shares plunged 64% after the energy trading company canceled a bond offering and slashed its 2002 cash flow forecast, sparking fears of a possible liquidity crisis. Standard & Poor's cut Williams' debt rating to junk status, citing the energy concern's liquidity problems and tumbling share price. The news set off a rout in the energy sector, with many stocks sliding to 52-week lows (The Wall Street Journal, 7/24).

Northern States Power recently tapped the retail bond market for $175 million of 40-year notes, a route that may have been triggered by the fact its parent Minneapolis-based Xcel Energy is on negative rating watch. Utilities will often reach out to retail investors, particularly when they have a strong reputation in their local service area, because they tend to be buy-and-hold investors, says Ellen Lapson, managing director at Fitch Ratings in New York. Institutional investors tend to be much more sensitive to the potential for downgrades and will trade more, she notes. Ed Legge, a spokesman for Xcel, declined comment about all aspects of the financing.

American Electric Power, once almost exclusively a coal-fired power producer, has repositioned its generation mix away from fossil fuels and will continue to do so in an attempt to cut its greenhouse gas emission levels. "If you knew us five years ago you wouldn't be able to recognize us these days," claimed Bruce Braine, v.p. for strategic policy analysis at the Columbus, Ohio energy giant. "There have been a lot of changes. We've now become a major natural gas player."

Richard Hunter, managing director in the global power group at Fitch Ratings, told attendees that the rating agency is increasingly looking at the impact of emissions obligations when rating the credit-worthiness of power companies.

Author and environmental campaignerRoss Gelbspan warned conference delegates that the introduction of global emissions trading standards would do little to alleviate the rise in greenhouse gas levels and would likely prove an unworkable framework. Gelbspan, author of "The Heat Is On: The High Stakes Battle Over Earth's Threatened Climate," says the primary problem with such a global trading platform is that it's neither monitorable nor enforceable and is bound to be plagued by irreconcilable disputes between countries. "We simply can't finesse nature with accounting tricks," he concluded.

J.P. Morgan has let go one of its two U.K. utility equity analysts. Edinburgh-based Adam Forsyth left the U.S. firm on July 12, and will not be replaced. Another equity analyst at the firm says J.P. Morgan decided to cut back its coverage of the sector because consolidation in the U.K. utility market has meant there are simply not enough U.K. power, gas and water companies for two analysts to cover. J.P. Morgan is retaining London-based U.K. utility analyst Caroline Randall.

Bonds Issue Date Maturity Issuer Amount Offer Price Type of Security Coupon (%) Spread to Treasury Moody's S&P Bookrunner(s) 7/12/02 7/12/05 Endesa 396.2 100 Fxd/Straight Bd 4.56 - A2 A SocGen M&A Date Announced Date Effective Target Name Target Advisors Target Country Acquiror Acquiror Advisors Acquiror Country Value ($mil) 7/11/02 7/11/02 Wels Strom GmbH - Austria Energie AG Oberoesterreich - Austria - 7/12/02 7/12/02 Agrupacio Energias Renovables - Spain Harpen AG - Germany - 7/12/02 7/12/02 Kinetic Energy Inc-Chatham D - Canada Undisclosed Acquiror - Unknown - 7/12/02 - Ontario Power Generation Merrill Lynch/Scotia Capital Canada Undisclosed Acquiror - Unknown - 7/14/02 - NewPower Hldngs-Certain Assets - U.S. Centrica - U.K. 21.85 7/15/02 - Aarekraftwerkes Ruechlig - Switzerland Nordostschweizerische - Switzerland - 7/15/02 - Armrosgazprom - Armenia Gazprom - Russian Fed 126 7/15/02 - Stendaler Stadtwerke - Germany Investor Group - Germany - 7/16/02 - JV-Cargill,Alliant - U.S. Cargill - U.S. - 7/16/02 - Mirant Gas-Fired Power Plant BofA U.S. Alliant Energy Resources - U.S. 109 7/16/02 - Termorio(Petroleo Brasileiro) - Brazil Petrobras - Brazil 50 Source: Thomson Financial Securities Data Company. For more information, call Rich Peterson at (973) 645-9701.

Citibank has iced plans to provide financing within the next few months for the Santa Isabel hydroelectric project in Brazil because of permitting delays at the Alcoa backed project. A banker close to the project said in May that it hoped to arrange up to $700 million in debt financing imminently (PFR, 5/20), but now says that the second quarter of next year is a more probable deadline.

Lead arrangers Citibank and Mizuho Financial closed syndication at the beginning of this month on a $210 million long-term non-recourse loan to partly finance the construction of Altamira, a $300 million 495 MW combined-cycle gas-turbine plant in northeastern Mexico. A New York project financier says final documentation should be sealed by the end of this month.