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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (51538)	1/26/2006 2:11:29 PM
From: shades	Respond to of 110194

Yet I keep hearing on CNBC from ditech commercials that REFI's are easier than ordering PIZZA and vosilla doesn't think we should throw CNBC in jail - hehe.

To: mishedlo who wrote (51538)	1/26/2006 2:11:54 PM
From: shades	Respond to of 110194

=DJ UPDATE: NRG Energy Near-Record $3.6 Bln Junk Bonds Rally (Updates with syndicate official comments, CFO's comments, Fitch comments, market analyst comments, bond and stock prices) By Tom Sullivan Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--NRG Energy Corp. (NRG) sold the second largest junk bond offering Thursday that was bid up sharply in the secondary market after it priced. NRG $3.6 billion of speculative-grade-rated bonds included $2.4 billion of 10-year senior unsecured notes priced at par to yield 7.375% and $1.2 billion of eight-year notes priced at par to yield 7.25%. A planned floating-rate portion was scrapped due to demand for the fixed-rate debt. And despite its size - second only to the fabled $6.1 billion bond sale by RJR Holdings Capital in May 1989, according to data provider Thomson Financial - it was said to be well oversubscribed. "There was demand from almost all major institutional accounts," said Steve Seltzer, global head of high yield at Morgan Stanley & Co., co-lead manager on the offering with Citigroup Global Markets. "There's a lot of liquidity in the high-yield market for the right" companies, he added. Trading in the bonds quickly picked up steam. "Secondary activity was slow to start as everyone awaited their allocations, but trading (turned) heavy," wrote Justin Monteith, market analyst at Montpelier, Vt.-based high-yield research firm KDP Investment Advisors, in a morning research note. The 10-year senior unsecured bonds surged 1 5/8 to 101 5/8 bid, while the eight-year bonds jumped 1 1/2 to 101 1/2. Proceeds from the offering will be used to help fund the Princeton, N.J.-based independent power producer's $8.3 billion leveraged buyout of Texas Genco LLC. The sellers were a private equity consortium consisting of The Blackstone Group Inc., Hellman & Friedman LLC, Kohlbert Kravis Roberts & Co. and Texas Pacific Group. A total of around $4.7 billion of pre-existing debt was slated to be refinanced as part of the transaction, and many holders of that debt rolled into the new bonds - fueling demand. Old King Coal NRG Chief Financial Officer Bob Flexon said the company had no desire to increase the size of the issue even with the strong list of orders. "The bond structure allows us to grow at the appropriate pace," Flexon said. "We didn't want to push it too big where it has a negative impact on our (credit) ratings," he said. The issue was rated B1 by Moody's Investors Service, single-B-minus by Standard & Poor's, and single-B by Fitch Ratings. In a press release Thursday, Fitch cited NRG's "attractive mix of low-cost and efficient coal and nuclear base-load capacity" as well as "the near-term cash flow certainty provided by (the combined companies') portfolio of medium-term power sales agreements and related fuel price hedges," among other things, for its rating. As part of the acquisition financing, NRG also priced $500 million of three-year mandatory convertible preferred securities via Morgan Stanley and Citigroup with a 5.75% coupon and conversion premium of 24%. This deal, rated B3 by Moody's and triple-C-plus by both S&P and Fitch, has a $75 million over-allotment option. NRG also priced an offering of 20.9 million shares of common stock at $48.75 each.