Merchant power generator NRG Energy Inc., which has power plants in Connecticut, said it terminated its credit sleeve — a capital loan backed by energy assets — with Merrill Lynch about one year earlier than originally planned.
The move removes the liens associated with the original credit sleeve amendment and brings the recently acquired Reliant Energy retail entities into the corporate collateral package.
As part of this transaction, NRG posted about $435 million of cash to Merrill Lynch and Reliant Energy’s counterparties. Merrill Lynch released their liens on about $300 million of unrestricted cash as well as $250 million of previously posted cash Reliant generated since last May’s acquisition by NRG. The posted funds came from a June 5 bond issuance that raised proceeds of about $678 million.
“By unwinding the credit sleeve early, Reliant’s substantial cash flow can be used at the corporate level in the company’s overall capital allocation plans,” said Robert Flexon, NRG Energy’s CFO. (AP)