Magazine article American Banker

CS First Boston Readies Calenergy Deal; $950M Loan Would Fund a Buyout of Northern Electric

Magazine article American Banker

CS First Boston Readies Calenergy Deal; $950M Loan Would Fund a Buyout of Northern Electric

Article excerpt

Credit Suisse First Boston is expected shortly to begin syndicating a loan totaling approximately $950 million to support California Energy's $1.31 billion acquisition of Britain's Northern Electric PLC.

The New York investment bank also served as adviser on the deal. Northern Electric shareholders approved the unsolicited bid from Calenergy by a slim margin on Dec. 24.

BankAmerica Corp., Secura Bank, Banque Paribas, and Royal Bank of Scotland have already committed as co-agents to the loan, which will be syndicated in the middle of January in the United Kingdom.

The acquisition comes toward the end of a wave of utility consolidation in Britain that was spurred by recent deregulation.

"The consolidation is almost complete," said Ali Agha, an independent power analyst at Donaldson, Lufkin & Jenrette Securities Inc.

Mr. Agha called the California Energy purchase a "good deal," with positive implications.

Credit Suisse has arranged a host of financings for Calenergy over the past few years, which helped it win the lead advisory and lending assignments.

"We try to focus and concentrate our interrelationships with financial institutions to get the maximum value, as opposed to always competitively bidding every piece to get the lowest price," said John Sylvia, senior vice president and chief financial officer at the Omaha-based power company.

"The lowest price doesn't necessarily mean the highest value," Mr. …

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