Coal plant owner Homer City gets short extension to work out debt issues

Homer City Generation LP, which controls the 1,884-MW Homer City coal plant in Pennsylvania, announced Oct. 17 that it has extended its previously announced forbearance agreement with certain holders of its outstanding secured notes to the earlier of 11:59 p.m. (Eastern Standard Time) on Oct. 24 or the occurrence of certain events specified in the forbearance agreement, unless further extended by the parties.

Homer City said it will use the extension to continue discussions with certain noteholders regarding a comprehensive financial restructuring with the intent to significantly deleverage its balance sheet and provide for an orderly transition of its ownership. Homer City expects to continue to operate its facilities and meet its obligations in the ordinary course.

Under the terms of the forbearance agreement, over 75% of the holders of the company’s outstanding 8.137% Senior Secured Notes due 2019 and 8.734% Senior Secured Notes due 2026 (collectively, the “Notes”) agreed to forbear from exercising any and all remedies available to them as a result of the company not making the payment due on the Notes on Oct. 3.

Homer City Generation is engaged in the business of operating and selling energy and capacity from its three coal-fired units and related facilities located near Pittsburgh, Pennsylvania, with an aggregate net capacity of 1,884 MW. The plant sells its baseload power into wholesale power generation markets in the PJM Interconnection and New York ISO regions.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.