Credit Suisse and Credit Lyonnais have arranged $815 million in financing for a joint venture to build a co-generation plant in Florida.
The financing was the largest ever syndicated for a U.S. power plant not wholly owned by a utility, according to the banks.
The borrower is U.S. Generating Co., a joint venture of Bechtel Group Inc., a San Francisco-based engineering firm, and Pacific Gas & Electric Co., a utility based in San Francisco.
$600 Million Construction Loan
The project is being built in Indian Town, northwest of Palm Beach.
The financing includes a $600 million construction loan. The interest rate on the 3 1/2-year loan is 125 basis points over the London interbank offered rate.
Banks are also giving the project a $65 million letter of credit and $10 million working capital line.
General Electric Capital Corp. is providing the balance of the financing.
As in most U.S. project finance deals, foreign banks are the main lenders. NationsBank Corp. is the exception; it has committed itself to underwrite $75 million. Sources said that Deutsche Bank and Sumitomo Bank Ltd. have each committed themselves to underwrite $135 million.
Harbinger of Confidence Seen
Others in the bank group are ABN Amro Bank, Banque Nationale de Paris, Bank of Nova Scotia, and Fuji Bank Ltd.
The secondary syndication should be completed in January.
Bankers involved in the deal said the loan is noteworthy not only because of its size but also because lenders have not promised refinancing when the term loan expires.
"This not only shows that the syndication market for large, high-quality deals has rebounded," a source said, "it's also a good indicator of the growing confidence in the marketplace that projects of this size will be able to achieve long-term, fixed-rate financings."