FINANCE BRIEFS

Mirant finalizes Birchwood sale: Mirant finalized the sale of its 50 percent stake in the Birchwood power plant (242 MW) in Fredricksburg, Va. to General Electric Co.’s finance unit for $71 million. Mirant will retain 0.5 percent ownership in the plant; Cogentrix owns the remaining 50 percent of the plant. The sale will allow Mirant to close a $19 million letter of credit related to financial obligations of the plant. The sale was first announced in May, but was delayed by Mirant’s Chapter 11 filing in July. The bankruptcy court has approved the deal.

Edison may sell its New Zealand stake: According to the Australian Financial Review, talk is brewing that Edison Mission Energy may sell its 51 percent stake in New Zealand power generator and retailer, Contact Energy Ltd. Edison faces $911 million debt maturity this December 11 and is now S&P rated B with negative implications.

Dynegy to sell Illinois Power to Exelon: The sale of IP for $425 million in cash will leave Dynegy with unregulated power generation and natural gas liquids businesses. It will also relieve Dynegy of $1.8 billion in debt (Dynegy’s total debt is $7.4 billion). IP was Dynegy’s smallest and only regulated business segment. The deal is contingent upon passage of legislation that is expected to be introduced in the Illinois General Assembly during its November season. The legislation would give the Illinois Commerce Commission authority to review the deal within nine months and to set rates for four years after a state-mandated transition period ends at the end of 2006.

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FINANCE BRIEFS

Exelon aims to buy Illinois Power: Exelon is in talks to buy Illinois Power from Dynegy Inc. for an undisclosed amount. If its acquisition succeeds, it will switch Illinois Power to the PJM Interconnection LLC. Dynegy had already committed Illinois Power to join the Midwest Independent System Transmission Operator (MISO). Domino effects may result in other utilities’ decisions to join MISO. For example, Ameren said it would need to rethink its decision if Illinois Power joins PJM, pointing to reliability concerns stemming from allowing Midwest-area Illinois Power to sell its power to the Northeast markets.

Progress Energy sells gas distribution co.: Progress Energy completed the sale of a local natural gas distribution company, North Carolina Natural Gas Corp., to Piedmont Natural Gas Co., Charlotte, N.C., for proceeds of $425 million, which it plans to use to reduce debt.

K.C. investment banking firm completes deals for two coop clients: Christenberry Collet & Co. served as financial advisor to Midwest Energy Inc. in its acquisition of certain electric service territory from Westar Energy Inc. and to Home Electric Association Inc. in its sale of generation and transmission assets to Alaska Electric and Energy Cooperative Inc.

Blackout not expected to affect near-term credit quality of electric utilities: Moody’s Investors Services did note, however, that several issues could impact credit quality in the future, such as potential changes in public policy (particularly regarding network reliability) and increases in capital expenditure programs and debt financing.