NRG Energy, Inc. (NRG) is proposing to acquire a portfolio from LS Power Equity Advisors (LS Power) for a total cost of about $12.1 billion. The portfolio includes Lightning Power LLC (Lightning), Linebacker Power LLC (Linebacker), and CPower Energy Ltd. (CPower). NRG will finance the acquisition by raising a mix of senior secured debt and senior unsecured notes, and issuing $2.8 billion of equity to LS Power. With this acquisition, NRG will now be fully matched in terms of generation to residential retail load in Texas, which we view as credit positive. Furthermore, the company is diversifying its geographic exposure with the Lightning assets, which are largely in the Pennsylvania-New Jersey-Maryland (PJM) and New York Independent System Operator (NY-ISO). The
