Dynegy Inc., the U.S. independent power producer that exited from bankruptcy protection last year, cut the rate on $1.8 billion in covenant-light loans it’s seeking to refinance debt, according to a person with knowledge of the matter.
A $500 million B-1 piece will pay interest at 3 percentage points more than the London interbank offered rate, down from 3.5 percentage points initially proposed, with a 1 percent minimum on the lending benchmark, said the person who asked not to be identified because the deal is private.
An $800 million B-2 portion will pay interest at 3 percentage points more than Libor with a 1 percent minimum, compared with 3.75 percentage points and with a 1.25 percent floor initially offered, the person said.
Both portions will come due in seven years, compared with 2 years on the B-1 slice initially proposed, and will be sold to investors at 99.5 cents on the dollar, the person said.
Lenders must let Credit Suisse Group AG, the bank arranging the financing, know by 5 p.m. today in New York if they will participate in the deal.
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