Allegheny Energy, Inc. (NYSE: AYE) today announced that its power generation business, Allegheny Energy Supply Company, LLC, has obtained a new $1 billion senior unsecured revolving credit facility with a three-year maturity. The financing replaces Allegheny Energy Supply’s existing $400 million revolving credit facility, which was scheduled to mature in May 2011.
“We’re pleased to have completed this financing on such attractive terms in a difficult credit environment,” said Paul Evanson, Chairman and Chief Executive Officer. “Through this and other transactions, we’ve significantly strengthened our liquidity position and improved our financial flexibility.”
Loans under the new facility generally will bear interest that is calculated based on the London Interbank Offered Rate (LIBOR), plus a margin based on Allegheny Energy Supply’s senior unsecured credit rating. Currently, the margin on LIBOR-based loans is 3.5%.
The new facility will be used for general corporate purposes and should provide adequate capacity for current plans to hedge unregulated plant output. As a result, Allegheny is not at this time pursuing the first-lien based facility for hedging which was previously under consideration.
Joint lead arrangers and book runners for the financings are Bank of America Merrill Lynch and The Bank of Nova Scotia. Bank of America, N.A. will act as administrative agent. According to these banks, the facility is the first broadly syndicated three-year credit facility completed in the industry in the past year.
Allegheny Energy
Headquartered in Greensburg, Pa., Allegheny Energy is an investor-owned electric utility with total annual revenues of over $3 billion and more than 4,000 employees. The company owns and operates generating facilities and delivers low-cost, reliable electric service to approximately 1.6 million customers in Pennsylvania, West Virginia, Maryland, and Virginia. For more information, visit our Web site at www.alleghenyenergy.com.
Forward-Looking Statements
In addition to historical information, this release contains a number of "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Words such as anticipate, expect, project, intend, plan, believe, and words and terms of similar substance used in connection with any discussion of future plans, actions, or events identify forward-looking statements. These include statements with respect to: rate regulation and the status of retail generation service supply competition in states served by Allegheny Energy’s distribution business, Allegheny Power; financing plans; demand for energy and the cost and availability of raw materials, including coal; provider-of-last-resort and power supply contracts; results of litigation; results of operations; internal controls and procedures; capital expenditures; status and condition of plants and equipment; capacity purchase commitments; regulatory matters; and accounting issues. Forward-looking statements involve estimates, expectations and projections and, as a result, are subject to risks and uncertainties. There can be no assurance that actual results will not materially differ from expectations. Actual results have varied materially and unpredictably from past expectations. Factors that could cause actual results to differ materially include, among others, the following: plant performance and unplanned outages; changes in the price of power and fuel for electric generation; general economic and business conditions; changes in access to capital markets; complications or other factors that render it difficult or impossible to obtain necessary lender consents or regulatory authorizations on a timely basis; environmental regulations; the results of regulatory proceedings, including proceedings related to rates; changes in industry capacity, development and other activities by Allegheny Energy’s competitors; changes in the weather and other natural phenomena; changes in customer switching behavior and their resulting effects on existing and future load requirements; changes in the underlying inputs and assumptions, including market conditions used to estimate the fair values of commodity contracts; changes in laws and regulations applicable to Allegheny Energy, its markets or its activities; the loss of any significant customers or suppliers; dependence on other electric transmission and gas transportation systems and their constraints or availability; changes in PJM, including changes to participant rules and tariffs; the effect of accounting policies issued periodically by accounting standard-setting bodies; and the continuing effects of global instability, terrorism and war. Additional risks and uncertainties are identified and discussed in Allegheny Energy’s reports filed with the Securities and Exchange Commission.
Contacts:
Allegheny Energy, Inc.
Media contact:
David
Neurohr, 724-838-6020
Director, External Communications
Media
Hotline: 888-233-3583
E-mail: dneuroh@alleghenyenergy.com
or
Investor
contact:
Max Kuniansky, 724-838-6895
Executive Director,
Investor Relations
and Corporate Communications
E-mail: mkunian@alleghenyenergy.com