Interesting DYN news...
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Will DYN have the staying power to fight for the pipe? If it draws down its line to avoid risking its razor thin credit rating, how is it going to fight JPM, C and ENE? Is DYN's goose going to be cooked as it cooked ENE's?
"Dynegy draws $400 mln in credit
HOUSTON, Dec 5 (Reuters) - Energy trader Dynegy Inc. (NYSE:DYN - news), which last week pulled out of a merger to buy now-bankrupt rival Enron Corp. (NYSE:ENE - news), on Wednesday said it drew down $400 million of its $2 billion credit line to cover the closing costs on its purchase of British gas storage assets.
Dynegy Chief Financial Officer Rob Doty said the company, which is now locked in a legal battle with Enron over a pipeline that was Dynegy's consolation prize from the busted deal, also issued $700 million in commercial paper.
Dynegy found it ``more advantageous'' to issue the paper and draw the credit, rather than try to place the debt into the A2/P2 debt market, which it deals in because of its BBB+ credit rating, Doty said.
``That market has got an upper limit associated with it, and it is hard to place (commercial paper) amounts in very large sums,'' Doty told Reuters in an interview. ``We felt it was better to draw down on our credit facilities than it was to push it into that market.''
Dynegy has about $200 million in cash on hand. Last week's closing of the United Kingdom natural gas storage assets, including wells and salt caverns, from BG Storage Limited, owned by BG Group Plc (NYSE:BRG - news) cost $600 million, Doty said. |
