Talen Energy Said to Pull $400 Million Loan Backing Purchaseby
Talen Energy Corp. pulled a $400 million acquisition loan it was seeking because of difficult market conditions, according to a person with knowledge of the deal.
The loan was to help finance the power-generation company’s planned purchase of Mach Gen LLC, said the person, who asked not to be identified citing lack of authorization to speak publicly. Debt financing commitments were due Thursday.
Talen decided not to pursue the loan because the higher interest rates lenders were requiring made it "no longer attractive as a financing option," spokesman George Lewis said by phone. Instead, the company will fund the Mach Gen deal with proceeds from asset sales announced earlier this month, he said.
Borrowers have struggled to get deals done in the slumping leveraged-loan market as investors push back on risky financing. Allentown, Pennsylvania-based Talen said in July that it agreed to buy Mach Gen for $1.18 billion, expecting to close the deal by the end of the year.
The company proposed paying interest at an initial rate of as much as 4.75 percent, according to data compiled by Bloomberg.
Talen was formed in June, when PPL Corp., formerly Pennsylvania Power & Light, spun off its U.S. generation business into a joint venture with Riverstone Holdings, a private-equity firm.