Bloomberg News

NRG Energy Said to Set Pricing on $3.9 Billion in Loans

June 06, 2011

(Updates with rate on term loan in third paragraph.)

June 6 (Bloomberg) -- NRG Energy Inc. set the interest rate it will pay on a $2.3 billion, five-year revolving credit line and a $1.6 billion, seven-year term loan to support a refinancing of debt, according to a person with knowledge of the matter.

The largest U.S. independent power producer will pay 2.75 percentage points more than the London interbank offered rate on the revolver, said the person, who declined to be identified because the terms are private. There is a 50 basis points fee for the undrawn portion of the credit line. A basis point is 0.01 percentage point.

NRG is offering to pay 3 percentage points to 3.25 percentage points more than Libor on the term loan, with a 1 percent minimum on Libor, according to another person briefed on the deal who declined to be identified because it’s private.

The company is proposing to sell the debt at 99.5 cents to 100 cents on the dollar, the second person said.

Lenders are offered 101 soft-call protection for one year, the person said, meaning the company would have to pay one cent more than face value to reprice the debt in its first year.

Commitments are due June 10 on the term loan portion and June 17 on the line of credit, the person said.

Morgan Stanley, Bank of America Corp., Barclays Plc, Citibank Group Inc., Credit Suisse AG, Deutsche Bank AG, Goldman Sachs Group Inc., JPMorgan Chase & Co., Mitsubishi UFJ Financial Group Inc., and Royal Bank of Scotland Group Plc are arranging the debt.

In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan, it can’t.

--Editors: Chapin Wright, Richard Bedard

NRG US <EQUITY> CN

To contact the reporter on this story: Krista Giovacco in New York at kgiovacco1@bloomberg.net.

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net.


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