HOUSTON, Dec. 1 /PRNewswire-FirstCall/ -- Reliant Energy announced
today that all closing conditions have been met, and its new
credit-enhanced retail structure is now in effect.
Under terms of the arrangement, Merrill Lynch guarantees the supply
purchases and related transactions of Reliant's retail business. As a
result, Reliant is no longer required to post collateral for its retail
supply purchases. In addition, Merrill Lynch has provided a credit facility
to finance the working capital needs of the retail business.
"This ground-breaking transaction provides substantial improvement in
the company's financial flexibility and represents a significant
accomplishment for Reliant," said Joel Staff, chairman and chief executive
officer, Reliant Energy. "With the closing of this transaction, we expect
$1.8 billion in collateral to be returned to Reliant by the end of the
year, significantly exceeding our 2006 collateral reduction goal by about
$800 million."
In conjunction with the agreement, the company has also completed a
series of refinancing activities which should result in a gross debt
reduction of more than $500 million. Reliant has refinanced its $1.7
billion revolving credit facility, $530 million of term loans, and $450
million retail receivables securitization facility with new credit
facilities including a $700 million revolving credit facility, a $400
million term loan and a $300 million synthetic letter of credit facility.
The interest rate on the new borrowings is LIBOR plus 2.375 percent.
Reliant Energy, Inc. (NYSE: RRI) based in Houston, Texas, provides
electricity and energy services to retail and wholesale customers in the
United States. In Texas, the company provides service to approximately 1.9
million retail electricity customers, including residential and small
business customers and commercial, industrial, governmental and
institutional customers. Reliant also serves commercial, industrial,
governmental and institutional customers in the PJM (Pennsylvania, New
Jersey and Maryland) market. The company is one of the largest independent
power producers in the nation with approximately 16,000 megawatts of power
generation capacity in operation across the United States. These
strategically located generating assets utilize natural gas, fuel oil and
coal. For more information, visit http://www.reliant.com/corporate .
This news release contains "forward-looking statements."
Forward-looking statements are statements that contain projections,
estimates or assumptions about our revenues, income and other financial
items, our plans for the future, future economic performance, transactions
and dispositions and financings related thereto. Forward-looking statements
relate to future events and anticipated revenues, earnings, business
strategies, competitive position or other aspects of our operations or
operating results. In many cases you can identify forward-looking
statements by terminology such as "anticipate," "estimate," "believe,"
"continue," "could," "intend," "may," "plan," "potential," "predict,"
"should," "will," "expect," "objective," "projection," "forecast," "goal,"
"guidance," "outlook," "effort," "target" and other similar words. However,
the absence of these words does not mean that the statements are not
forward-looking.
We have based our forward-looking statements on management's beliefs
and assumptions based on information available to management at the time
the statements are made. Actual results may differ materially from those
expressed or implied by forward-looking statements as a result of many
factors or events, including the ongoing negotiation of the retail credit
structure, legislative and regulatory developments, the effects of
competition, financial market conditions, the timing and extent of changes
in commodity prices and interest rates, weather conditions, changes in our
business plan and other factors we discuss in our filings with the
Securities and Exchange Commission. Each forward-looking statement speaks
only as of the date of the particular statement and we undertake no
obligation to update or revise any forward- looking statement, whether as a
result of new information, future events or otherwise.
SOURCE Reliant Energy, Inc.
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Related links:
http://www.reliant.com/corporate
CONTACT:
investors, Dennis Barber, +1-713-497-3042, or
media, Pat Hammond, +1-713-497-7723, both of Reliant Energy, Inc.
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