Dynegy plans $185 million letter-of-credit facility

By Jennifer Chiou

New York, Sept. 15 - Dynegy Inc. is planning a new letter-of-credit facility, according to a slide presentation to investors filed with the Securities and Exchange Commission.

The proposed facility is related to Dynegy and LS Power Group's agreement to combine all of their power generation portfolios, under which Dynegy will acquire a 50% ownership interest in LS Power's generation development business.

The transaction consideration will have an equity value of about $2 billion and an enterprise value of about $4.1 billion.

Dynegy said it will issue $1.958 billion of stock and $275 million of junior subordinated notes to LS Power in addition to using $150 million of cash on hand.

Proceeds from the new facility will go towards supporting credit.

Dynegy is a Houston-based electricity provider.

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