Simpson Thacher advised Morgan Stanley as administrative and collateral agent for the lenders on the deal.
Frontera Holdings operates a 526 MW combined cycle natural gas plant near Mission, Texas, and exports power to Mexico.
Frontera has $773m in debt under a secured term loan and revolving credit facility, as well as $171m in secured notes. Under this agreement, lenders agree to convert a substantial portion of the current term loan and revolving credit facility debt into equity. Once approved by the Bankruptcy Court, these lenders will become the company’s new owners.
Furthermore, Frontera has secured $70m in debtor-in-possession (DIP) financing to ensure liquidity throughout the Chapter 11 process. The company’s liquidity position will allow the Frontera Generation Facility to operate the business in the ordinary course and fund Chapter 11 administrative costs. Frontera’s plan of reorganization was confirmed on April 26, 2021 and went effective on July 28, 2021. Morgan Stanley acted as administrative and collateral agent on the deal.
The Simpson Thacher team included David Lieberman (Picture), Elisha Graff, Jamie Fell and Jonathan Mitnick.
Law Firms: Simpson Thacher & Bartlett;
Clients: Morgan Stanley;