PF Archive

High NRG

01 11 2001

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...