Reliant Energy Eliminates a Credit Facility (RRI, CEG, BRK.A)

By Douglas A. McIntyre Updated Apr 28, 4:03AM EDT · Published Dec 8, 9:17AM EST

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Reliant_logo Late on Friday, Reliant Energy (NYSE:RRI) announced that it had terminated a $300 million retail working capital facility with Merrill Lynch. The company had failed to meet its EBITDA covenant on the agreement in the third quarter, and had received a waiver of the covenant through December 5th.

The company said that it terminated the facility because it "is anappropriate way to address any possible issues that might be raisedregarding compliance with this covenant." Yeah, like Reliant is likelyto miss the EBITDA target again.

Reliant noted that it has $1.6 billion in liquidity, about $421 millionof which is credit not including the terminated facility. Reliant hasalready said that it is pulling of of its wholesale and commercialmarkets, and that the company’s board is exploring "strategicalternatives" including selling of part or all of the company.

This story has been going on for a while now, but Reliant does not seemto be having any luck selling itself. Maybe once the Constellation(NYSE:CEG) deal with either Berkshire Hathaway (NYSE:BRK.A) or EDF is settled, a line will begin to form for Reliant.

Paul Ausick
December 8, 2008

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.