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RWE's recently announced acquisition of English utility Innogy has left analysts and bankers speculating over the next consolidation play in the U.K.'s electricity supply business. While they disagree on the end game, all believe that further m&a activity is inevitable.

Duke Energy is aiming to issue up to $1 billion in mandatory convertible securities within the next year, as part of the financing for its acquisition of Westcoast Energy.

International Power will likely look to add coal-fired generating capacity in the U.S. and has already had discussions with AES, Enron and NRG to acquire some of their assets.

TECO Energy is looking to raise $300 million in equity financing later this year or early 2003 to support its growth needs until 2004. Gordon Gillette, cfo, says the cash proceeds will also be used to strengthen the energy holding company's balance sheet to help protect its credit rating in the wake of the Enron meltdown.

AES Parana, a vertically integrated Argentine utility, is close to defaulting on a $112 million non-recourse project loan from the Inter-American Development Bank and six private-sector banks, due to the country's currency devaluation and its inability to fund U.S. dollar-denominated debt. According to a New York project financier, the loan, which closed in June 1999, was originally used for the construction of the 826 MW, $448 million gas-fired plant. AES Parana is owned jointly by AES (67%) in Arlington, Va. and PSEG Global (33%) of N.J.

Baltimore-based Constellation Energy tapped the fixed-income mart for $1.8 billion in a three-part issue on March 21, upscaling it from a planned $1.5 billion deal, which itself was north of the $1 billion in notes the company was forecasting in February (PFR, 2/10). A Constellation spokeswoman declined comment on the financing. The size reflects the significant amount of short-term paper power company needs to pay down, and also some maturing debt issues, says Ray Leung, managing director and fixed-income analyst at Bear Stearns.

Bonds Issue Date" Maturity Issuer Amount ($ mil) Offer Price Type of Security Coupon (%) Moody's S&P Bookrunner(s) 03/21/02 04/01/07 Constellation Energy 600 99.922 Notes 6.35 Baa1 BBB+ Lehman/Salomon 03/21/02 04/01/12 Constellation Energy 600 99.566 Notes 7 Baa1 BBB+ Lehman/Salomon 03/21/02 04/01/32 Constellation Energy 600 99.763 Notes 7.6 Baa1 BBB+ Lehman/Salomon 03/21/02 04/01/32 Entergy Arkansas 100 100 Fst Mtg Bonds 6.7 Aaa AAA Morgan Stanley/Salomon 03/21/02 03/26/12 Northwest Natural Gas Co 10 100 MTNs 7.13 A2 A- Merrill 03/21/02 03/26/12 Northwest Natural Gas Co 10 100 MTNs 7.13 A2 A- Bank One 03/21/02 03/26/07 Northwest Natural Gas Co 20 100 MTNs 6.31 A2 A- UBS Warburg 03/21/02 03/26/12 Northwest Natural Gas Co 10 100 MTNs 7.13 A2 A- UBS Warburg 03/22/02 03/26/05 SK Global Belgium 30 99.85 Flt Rte Gtd Bds Floats NR NR DBSING 03/25/02 03/28/12 Central Hudson Gas & Electric 12 100 MTNs 6.64 A2 A JP Morgan 03/25/02 03/28/07 Central Hudson Gas & Electric 11 100 MTNs 5.87 A2 A JP Morgan M&A Date Announced Date Effective Target Target Advisors Target Country Acquiror Name Acquiror Advisors Acquiror Country Value ($mil) 03/21/02 - Dispetchersky Tsentr - Russian Fed Tatneft - Russian Fed - 03/21/02 - Elettrogen - Italy Endesa - Spain 111.926 03/21/02 03/21/02 Setevaya Kompaniya - Russian Fed Tatneft - Russian Fed - 03/22/02 - Innogy CSFB/Deutsche Bank United Kingdom RWE Merrill Lynch Germany 7396.143 03/25/02 - Perryville Energy Partners - U.S. CLECO - U.S. 67.500 03/25/02 - Tbilgaz(Georgia) - Georgia Investor Group - Israel - 03/25/02 - Tindra - Norway Hafslund - Norway 33.912 03/25/02 - Wessex Water Schroder Salomon Smith Barney U.K. YTL Utilities Deutsche Bank U.K. 1767.031 Source: Thomson Financial Securities Data Company. For more information, call Rich Peterson at (973) 645-9701.

Louisiana Power & Light and Arkansas Power & Light, two electric utility subsidiaries of Entergy, issued $150 million and $100 million, respectively, of 30-year first mortgage bonds late last month to refinance existing debt at cheaper rates. The opportunistic move will slash Entergy's interest bill by $22 million, according to Frank Williford, assistant treasurer in New Orleans. "We decided to call these bonds now because the low interest rates we received on these deals were terrific," he says.

Williams intends to walk away from negotiations if it does not receive at least $900 million for its Williams Pipe Line, which it recently agreed to sell to Williams Energy Partners, the Tulsa, Okla. energy concern's master limited partnership. Keith Bailey, chairman of Williams, said, "The pipeline is a valuable asset that a lot of companies want. If we can't [execute the deal] with Energy Partners, then we'll do it with another company. We're not going to budge on the price tag."

CIBC held its annual power, power technology and energy sector shindig at the Millennium Hotel in New York on March 20-21. Some 500 power company executives, institutional investors, bankers and analysts attended the event. Amanda Levin Arnoldreports: