Dynegy says banks approve debt refinancing

New York, July 28 - Dynegy Inc. said its lenders agreed to amend the company's credit facility to allow a series of refinancing and restructuring transactions.

The Houston energy company said it received more than 99% approval from the lenders. It noted that 67% approval was required.

The amendment will allow Dynegy to make its previously announced offerings of $1.325 billion of second priority senior secured notes and $300 million convertible subordinated debentures, repurchase up to $650 million of its senior notes in the tender offer and consent solicitation currently under way and exchange the series B preferred stock held by a subsidiary of ChevronTexaco Corp. for $225 million in cash and $625 million in new securities.

Dynegy said the amendment does not become effective until various conditions are met including completion of the new deals and the use of proceeds to prepay some credit facility borrowings.

The amendment requires the company to receive at least $1.5 billion in proceeds before using any proceeds to make the $225 million cash payment to ChevronTexaco.

Dynegy said it plans to use all the proceeds from the proposed securities offerings, together with cash on hand, to repay outstanding debt, including notes purchased in the tender offer, some credit facility borrowings, amounts outstanding under the secured financing tied to its Midwest generation assets, and transaction fees and related expenses.

If Dynegy raises at least $1.5 billion of proceeds, it said it intends to make the $225 million cash payment to ChevronTexaco in connection with the restructuring of the series B preferred stock.

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