IPPs and Merchant Energy Co.s Message Board

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Strategies & Market Trends : IPPs and Merchant Energy Co.s

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To: NDBFREE who wrote (3020)	12/30/2003 7:46:41 AM
From: Larry S.	Read Replies (1) of 3358

Reliant Prepays $917 M Of Debt, Cancels $300 M Credit Facility And Gains Flexibility To Buy Assets DOW JONES NEWSWIRES HOUSTON -- Reliant Resources Inc. (RRI) prepaid $917 million in debt using funds that were earmarked for the now unlikely purchase of a stake in energy company Texas Genco Holdings Inc. (TGN). The wholesale and retail energy seller also retired a $300 million senior credit facility and amended its bank credit facilities. In a press release Monday, energy company Reliant said it funded the debt prepayment through an escrow account formed for the potential purchase of electric and gas distributor CenterPoint Energy Inc.'s (CNP) 81% stake in energy company Texas Genco. Earlier this month, Reliant said it was unlikely to exercise an option to purchase the stake. About $784 million was used to prepay Reliant Resources' bank term loans while $133 million paid down its revolving credit facility. With the debt prepayment, Reliant Resources said it resolved all "soft amortization" objectives its bank credit facility and has no further requirements until its credit facilities mature in 2007. In 2003, Reliant said it prepaid over $2 billion in term loans. Reliant Resources retired the $300 million credit facility, obtained in March of this year, to eliminate associated costs. The company said it never used the facility and instead focused on reducing liquidity. The amendment to its bank credit facilities grants Reliant the ability to purchase up to $1 billion in individual generating assets from Texas Genco and other entities to support its Texas retail business. The amendment also allows the company to increase debt to finance any possible Texas Genco acquisitions. Earlier in December, Reliant sold its Dutch electricity-generation business to Dutch energy and water company Nuon NV (N.NUN) for $1.3 billion. Proceeds were used to reduce debt, which totaled about $7.52 million in debt as of Sept. 30. New York Stock Exchange-listed shares of Reliant Resources recently traded at $7.04, up 22 cents, or 3.2%.

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