Abstract
In September 1988, U.S. Generating Company, LLC (USGEN) completed its & 1.6 billion acquisition of 4,700 MW generating capacity from New England electric system. The financing structure used for the acquisition diversifies lender risk across the newly acquired New England portfolio and also takes advantage of the credit profile of USGEN's existing assets. The two tiers of commercial bank debts as well as 144A bonds issued as part of a leverage lease obtained investment-grade ratings ad resulted in oversubscribed bond issues and attractive terms and pricing. While dependent on the quality of the acquired portfolio, USGEN's approach provides an innovative model for financing merchant power in a deregulated industry.
- © 1999 Pageant Media Ltd
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