The U.S. Bankruptcy Court approved Homer City Generation’s redacted motion for an order authorizing (a) assumption of engagement letter between the Debtor and Morgan Stanley Senior Funding, as lead arranger for exit or other financing; (b) payment of related fees and expenses and (c) indemnification of Morgan Stanley Senior Funding.
As previously reported, “The Debtor executed an engagement letter (the ‘Engagement Letter’) with Morgan Stanley Senior Funding on December 13, 2016. Pursuant to the Engagement Letter, Morgan Stanley has agreed to act as the sole lead arranger, sole bookrunner and/or lender, as applicable, of any secured or unsecured, senior, subordinated or mezzanine, loan or credit facility (including but not limited to letters of credit or any debtorin-possession financing that is by its terms convertible into exit financing) for the Debtor and/or any of its subsidiaries or affiliates in connection with any bankruptcy-related debt financing of the Debtor and/or the Homer City Generating Station, other than a ‘Qualified DIP Financing’ (the ‘Exit Facility’).”
In addition, “Following emergence from chapter 11, the Debtor plans to utilize the funds available under the Exit Facility to (i) fund distributions, costs, and expenses contemplated by the Plan, (ii) provide letters of credit or other credit support to replace GE guarantees of certain Homer City obligations as required under the Plan and the RSA, and (iii) fund general working capital and for general corporate purposes of the Debtor. As an inducement to Morgan Stanley to enter into the Engagement Letter, the Debtor agreed to pay certain fees in connection with the Exit Facility.” The Court also approved the Debtors’ motion to file the engagement letter under seal.
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