Northeast Utilities (NU) has closed a $430 million bond financing to take off balance-sheet its new unregulated generation assets. The assets are predominantly hydroelectric and the portfolio's centrepiece is a pumped storage station, so the bookrunners are presenting the deal as a first for a pumped storage facility. For the purposes of Northeast Utilities, however, the financing presents it with a core vehicle for expanding, whether by acquisition or development, its unregulated generation business.
The name of the special purpose vehicle is the same as that given by NRG Energy to its assets in the region ? no coincidence since both gencos were formerly owned by the same utility. NU began the process of deregulation in 1999 with the sale of its generation capacity through a JP Morgan-led auction. NRG picked up the fossil assets (and launched them into the bond market in the early part of 2000), whilst NU set up an acquisition vehicle, Northeast Generation (NG) to make a pitch for the hydro capacity.
In April 1999 Citibank/Salomon Smith Barney picked up the financial advisor's mandate, and the auction took place over June and July of that year. Regulators in the region, which oversaw NU subsidiaries and sellers...
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