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发帖数: 462 | 1 Dynegy Unit Skips $44 Million Interest Payment
Dynegy Inc. (DYN) said Tuesday that one of its subsidiaries has skipped an
interest payment of nearly $44 million on outstanding debt in a move that
could lead to default.
Dynegy Holdings LLC skipped the payment on senior unsecured notes due in
2016 that carry interest of 8.4%, Dynegy said. The company has 30 days
before the missed payment is considered a default on the debt.
Dynegy said it will "continue to evaluate options" to manage the unit's debt
load and has been in talks with holders of the debt to reach a resolution.
The missed payment is the latest development in the Houston power company's
long-running struggle against a mountain of debt, low power prices that have
hit the bottom line and disputes among large shareholders about the company
's future.
On Tuesday, Dynegy extended the withdrawal deadline on its offer to exchange
up to $1.25 billion of Dynegy Holdings debt for new 10% senior secured
notes, to Thursday at midnight EDT. The company said offers to exchange the
older debt for the new debt faced the same deadline.
The exchange offer has received a tepid response from bondholders and has
been shunned by a group of hedge funds that is suing the company.
Standard & Poor's Ratings Services has called the exchange offer "coercive
and tantamount to default," saying it would provide lenders of various
maturities from 60% to 72% of principal and lower. S&P said it would cut
Dynegy's ratings to selective default if the exchange offer is completed.
Dynegy said the "new notes" it is offering have not been registered under U.
S. securities laws and may not be sold in the U.S. unless the company is
able to enter into a registration rights agreement or get an exemption from
registration requirements.
Earlier this year, Dynegy reorganized its operations into separate units,
with one unit holding its natural gas-fired power plants, called Dynegy
Power, and a second unit holding its coal-fired power plants, called Dynegy
Midwest Generation. The company has a third unit, called Dynegy Northeast
Generation, for two East Coast power plants that are under lease financing
agreements with Public Service Enterprise Group Inc. (PEG). Dynegy Holdings
was saddled with $3.5 billion of debt.
A group of bondholders led by Avenue Capital sued Dynegy in September in an
attempt to block the restructuring. They contended that the reorganization
put Dynegy's assets out of reach of creditors, in a move intended to defraud
debt investors and benefit shareholders.
The lawsuit was filed by affiliates of Avenue Capital, Caspian Capital
Partners, Mariner LDC, which Caspian advises, Oaktree Capital Management and
Western Reserve Life Assurance Co.
In February, shareholders rejected an offer by Carl Icahn, one of Dynegy's
largest shareholders, to buy Dynegy for $5.50 a share. Dynegy's other top
shareholder, Seneca Capital Investments LLC, had opposed that proposal.
Shortly after, Dynegy's top two executives resigned, and its board agreed to
step down.
Last year, Icahn and Seneca rejected an offer by Blackstone Group L.P. (BX)
to buy Dynegy for $4.50 a share, saying the offer undervalued the company.
Shares of Dynegy closed 7.4% lower Tuesday at $3.40 and fell a further 2.7%
to $3.31 in after-hours trade. |
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