PG&E Corporation Honored For Innovative Merchant Generation Financing


Bethesda, Md.– PG&E Corporation (NYSE:PCG) executed the best project finance deal in North America last year, according to Global Finance magazine, which highlighted the transaction in its February 2000 issue.

The landmark financing, for the Lake Road merchant power plant, was also recognized as among the year’s best in recent issues of Asset Finance International and Corporate Finance magazines. All three publications cited the groundbreaking and innovative structure of the transaction, and the benefits it provides to the company, as cause for its honors.

Global Finance featured the transaction in its "The Best Deals of 1999" issue. In late 1999, the project was honored as the best U.S. asset finance power deal of the year by Asset Finance International and was honored among only three project finance deals by Corporate Finance.

"PG&E Corporation is pursuing an aggressive strategy for growth in the competitive power business, a major portion of which is the more than 10,000 megawatts of new generation we currently have in development or construction," said Thomas G. Boren, executive vice president of PG&E Corp. and president and CEO of the Corporation’s National Energy Group. "Our excellence in project finance -- as proven again by our Lake Road financing -- will be critical in helping us to realize our growth objectives and optimize the earnings from this portfolio over the long term."

The 792-megawatt Lake Road Generating Plant, located in Killingly, Conn., is one of three merchant facilities currently under construction by PG&E Corporation. The Corporation expects to bring as many as 5,000 megawatts of additional merchant generation online within the next few years.

The financing for the Lake Road Generating Plant was structured as a project-financed synthetic lease, using a special securitized commercial paper facility. This combination of facilities is a first-of-its-kind arrangement in the bank market.

"From merchant plant financing and using a synthetic lease, to a 50-percent equity commitment being funded through the securitized commercial paper facility, this is a transaction unlike any out there," added John R. Cooper, senior vice president and chief financial officer for PG&E Corporation’s competitive generation unit.

The transaction’s lead arranger was Citibank. The arranger and co-arranger were Société Générale and Deutsche Bank, respectively. There were 17 additional lenders, contributing to an over subscription in syndication.

Global Finance, with a circulation of more than 50,000, reaches top-level executives and decision-makers in the financial community. It is published by Global Finance Media, Inc. in New York, N.Y. Asset Financial International has a circulation of 6,000, one of the highest among the niche asset finance and leasing industry. Corporate Finance has a circulation of 60,000. Both are published by Euromoney Institutional Investor, PLC based in London, England.

PG&E Corporation, with revenues of more than $20 billion and operations in 27 states, markets energy services and products throughout North America through its National Energy Group. PG&E Corporation's businesses also include Pacific Gas and Electric Company, the Northern and Central California utility that deliver natural gas and electricity to one in every 20 Americans.


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