Search results for

Powergen has decided to keep one of the three U.K. natural gas-fired generators it put up for sale earlier this year, having sold the second plant, the 715 MW Rye House facility, last week to ScottishPower for GBP220 million ($324 million). In October it sold the 2,000 MW Cottam power station to London Electricity for GBP398 million (PFR, 10/30). "Powergen has decided to keep Connah's Quay in part because of its superior cash generative characteristics and greater scale," says a spokeswoman. Connah's Quay has 1,420 MW in capacity. Another reason why it chose to offload Rye House rather than Connah's Quay is because the former has a deeply out-of-the-money gas purchase contract that was put in place when gas prices were significantly higher than today, says the spokeswoman. She declined to comment on the contract's negative value, but says ScottishPower's valuation of the plant at GBP450 per kilowatt implies the gas contract has a negative value of GBP101 million. However, one analyst at a U.K. bank questioned Powergen's motive for keeping Connah's Quay. He speculates that a scarcity of buyers in the U.K. market and poor asset valuations was probably of greater significance in deciding to end the sale.

Following is a directory of ongoing generation asset sales. The accuracy of the information, which is derived from many sources, is deemed reliable but cannot be guaranteed. To report new auctions or changes in the status of a sale, please call Will Ainger, managing editor, at (44-20) 7303-1735 or e-mail wainger@euromoneyplc.com .

Austin Energy is prepping a $140.8 million issue of revenue refunding bonds to refinance a higher coupon 1992 series. Harvey Winkelmann, v.p. of finance, says the municipal utility will achieve lower rates, though he was unable to be more specific as terms and documentation are still being finalized. Under its rules, Austin Energy needs to be able to achieve at least 4.25% in present value savings before it can retire and refinance debt, he adds.

The Florida Municipal Power Agency was set to tap the bond market late last week with a $245 million multi-tranche offering of floating-rate revenue bonds to pay down existing debt and slash its interest burden. A spokesman in Orlando says the agency hopes to cut its funding bill by some $5 million annually by refinancing $250 million of bonds with average coupons of roughly 5%.

XL Capital Assurance has completed what it believes to be the first insurance wrap for a U.S. non-recourse power financing, through guaranteeing a $325 million bond offering issued by NRG Energy late last month.

Greenhill & Co. has hired Richard Morse, U.K. power banking chief at Goldman Sachs, to forge a presence for the transatlantic advisory boutique in the European power market. Morse will join Greenhill in October after three months of gardening leave. He becomes the firm's 18th London-based partner.

Investment banks are jockeying to win two of the most potentially lucrative underwriting mandates in recent memory following the recent announcement by the French government that it will privatize and partially float stakes in Electricité de France and Gaz de France.

Lead arrangerBarclays Capital has closed syndication of a EUR219.5 million 16-year non-recourse loan on behalf of Northern Irish utilityViridian Power, with the addition of nine banks to the lending group. A syndicate official at Barclays in London described the syndication effort as a resounding success, noting the loan was slightly oversubsribed. However, two other financiers downplayed the success of the deal, noting the syndicate size was on the small side given the amount of firms pitched the deal. They note that concerns about the credit quality of the sponsor, and fears that an interconnector between Ireland and the U.K. could send Irish wholesale power prices spiraling downwards dissuaded some banks from joining the deal.

InterGen last week was forced to flex the terms of a GBP429 million ($633 million) non-recourse loan, making it the second U.K. project sponsor this month to cave in to the pricing demands of a lukewarm bank market. Two weeks ago Conoco Global Power and its lead arranger also jacked up the pricing of its Immingham project loan after the deal struggled in wholesale syndication for the better part of four months. It could not be determined by press time whether InterGen or its lead arrangers will have to foot the bill for the sweetened terms. Officials at both generators did not return calls.

Carl Tischler, v.p. in J.P. Morgan's London-based energy group is set to leave the U.S. firm towards the end of this summer to set up a London investment banking boutique to advise on renewable energy projects. An official familiar with his plans says he has yet to determine if he will set up the shop independently or form a joint venture with an existing company. Tischler declined to comment.