CNL Restructures Its Evangeline Plant Contract With JP Morgan
Analysts at KeyBanc Capital Markets maintain their "hold" rating on Cleco Corporation (NYSE: CNL).
In an 8-K filing, Cleco has announced a restructuring of the tolling arrangement of its Evangeline plant. JP Morgan had leased the plant through 2020, which has been shortened to year-end 2011. “Under the transaction, JP Morgan essentially forgives $126 million of project debt it held and will pay CNL $56 million, which will largely be used to call and pay a premium on the remaining debt not held by JPM,” the analysts say.
“While CNL will lose earnings (we estimate at roughly $0.10 per share), the Company gains an unencumbered asset, which may have strategic value… We also note that CNL will have the ability to bid the asset into wholesale contracts in 2013, when large municipal contracts in the region are set to expire,” KeyBanc Capital Markets adds.
