Shearman & Sterling advises on Secured Credit Facility for Topaz Holdings
15 May 2008
Jeffrey P. Crandall , Geoffrey B. Goldman , Patricia G. Hammes , Bradley K. Sabel , Howard M. Steinberg , Michael H. Torkin , Cynthia Urda Kassis , David L. Bleich , Jeffrey L. Salinger , Karin E. Weiner

New York, May 15, 2008—Shearman & Sterling represented Morgan Stanley & Co. Incorporated, Dexia Credit Local (New York Branch), ING Capital LLC and Natixis (New York Branch) as joint lead arrangers and joint book running managers of a $740 million secured credit facility for Topaz Holdings, LLC. The proceeds from this financing will be used to support a $1.3 billion project by Topaz Power Group.

The project will consist of converting two of Topaz’s existing power plants to a more efficient combined-cycle technology and upgrading a third power plant by replacing older units with two fast-start peaking units. The company expects that the converted plants will begin operations in 2009.

Shearman & Sterling also represented Morgan Stanley Capital Group Inc. in the execution of the initial secured commodity hedges for the Topaz facilities and the joint lead arrangers in related interest rate hedging transactions.

One of the highlights of this deal is the debt to equity ratio. The debt financing is expected to be only 63% of the total project cost.

Topaz Power Group is a Texas-based independent power producer owned by Carlyle/Riverstone Holdings. Topaz owns three plants: Nueces Bay plant, located on the north side of the Corpus Christi Ship Channel; Barney M Davis Power Station, located on the south side of the Corpus Christi Ship Channel, and the Loredo Power Station, located in the city of Laredo, adjacent to the Rio Grande River.

The New York-based Shearman & Sterling team was led by partners Jeffrey P. Crandall (executive compensation & employee benefits), Geoffrey Goldman (asset management), Patricia Hammes (finance), Mitchell Menaker (tax), Malcolm K. Montgomery (property), Maura O’Sullivan (finance), Bradley K. Sabel (asset management), Howard Steinberg (finance), Michael Torkin (bankruptcy & reorganization) and Cynthia Urda Kassis (finance), of counsel David Bleich (finance), counsel Matthew Donaher (finance), Robert Freedman (finance), Susan Hobart (finance), Jason Y. Pratt (property), Jeffrey L. Salinger (property) and Karin Weiner (finance), and associates Adrienne S. Ali (asset management), Paige Berges (finance), Robert W. Bosslet III (finance), Emeka Chinwuba (finance), Laura R. Chirita (property), Sarah Izfar (finance), Seth J. Kerschner (property), Amy G. Lewis (tax), Mark Perry (finance) and Eva A. Rasmussen (executive compensation & employee benefits).

For additional information contact:
Ron Brandsdorfer | New York | T +1.212.848.5081 |