2001 has been a year characterised by increased lender caution,
rising fees and continued nervousness about deregulation. This was
the backdrop to the ambitious launch of a $2.5 billion construction
revolving credit, lead arranged by Credit Suisse First Boston, to
an already wary market. The deal closed, after low-level sniping
from participant banks, and NRG has gone on to launch two new
single asset deals.
The first, Brazos Valley, is a single-asset, merchant financing
located within the tricky ERCOT market. Brazos Valley is a 633MW
natural gas fired merchant power plant located in Fort Bend County,
Texas, 30 miles south-west of Houston. Avista-STEAG LLC had a 51%
stake in the project while NRG was set to own 49%. After the
departure dirt of Avista and then, at close, of STEAG, ABN Amro
launched the $189 million debt to co-arrangers. Royal Bank of
Scotland (documentation) and Hypovereinsbank (syndication agent)
jointly underwrote with ABN at close.
The deal managed to pick up a different set of investors to those
that came in on the revolver, and this may point to a divergence
between the participant types on portfolio and single-asset deals.
Certainly NRG will need all the debt capacity it can find in the
coming months, despite the fact that much of its construction
programme is now covered by the construction revolver (for more
details on the deal, see Project Finance Magazine, June 2001).
NRG has stealthily built up a position as one of the world's
leading independent power producers, with a total capacity of
28.927GW ? although this figure will probably change very fast.
This puts it ahead of peers like Edison...
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