Allegheny Energy Completes $1 Billion Credit Facility

GREENSBURG, Pa.--(BUSINESS WIRE)--Allegheny Energy, Inc. (NYSE: AYE) today announced that its power generation business, Allegheny Energy Supply Company, LLC, has obtained a new $1 billion senior unsecured revolving credit facility with a three-year maturity. The financing replaces Allegheny Energy Supply’s existing $400 million revolving credit facility, which was scheduled to mature in May 2011.

“We’re pleased to have completed this financing on such attractive terms in a difficult credit environment,” said Paul Evanson, Chairman and Chief Executive Officer. “Through this and other transactions, we’ve significantly strengthened our liquidity position and improved our financial flexibility.”

Loans under the new facility generally will bear interest that is calculated based on the London Interbank Offered Rate (LIBOR), plus a margin based on Allegheny Energy Supply’s senior unsecured credit rating. Currently, the margin on LIBOR-based loans is 3.5%.

The new facility will be used for general corporate purposes and should provide adequate capacity for current plans to hedge unregulated plant output. As a result, Allegheny is not at this time pursuing the first-lien based facility for hedging which was previously under consideration.

Joint lead arrangers and book runners for the financings are Bank of America Merrill Lynch and The Bank of Nova Scotia. Bank of America, N.A. will act as administrative agent. According to these banks, the facility is the first broadly syndicated three-year credit facility completed in the industry in the past year.