PF Archive

The more things change...

01 11 2005

If you are interested in the latest US power finance developments please join us at the... US Power and Utility Finance Conference in Las Vegas on February 16-17. For more information go to www.euromoneyseminars.com or email ofrancescone@euromoneyplc.com ------------------------------------------------------------------------------------------------------------------- US power bankers are much more cheerful than they have been in several years. A number of banks are hiring new staff, and some institutions are expanding out of niche products and into general power finance. Investment banks are devoting more resources to the sector, if only to enhance their profitable trading operations. Since bankers returned from holidays in early September, there have been several leveraged acquisition financings, as well as some refinancing, and one restructuring. All of these have been achieved on terms that, while frequently less attractive than the 1999-2000 boom years, are much better than would have been expected two years ago. But these financings are likely to prove temporary, designed to hold owners and lenders over until a clearer picture of power prices and the regulatory environment emerges. The current continued low pricing on deals – some have come in as low as 200bp over Libor – might obscure this reality, but further refinancings are likely. The Energy Policy Act, which President Bush signed in August, proved to be much more of an opportunity for the power industry than the declaration of energy independence promised by its proponents. The Act can be seen as a bag of subsidies for technologies as...