MIRANT JUMPS ON BONDHOLDER SUPPORT

CBS Market Watch | 06/30/2003 | Lisa Sanders

[MeneMeneTekelUpharsin]

DALLAS (CBS.MW) -- Mirant Corp.'s shares rose nearly 20 percent Monday after the power producer said a majority of bondholders support an amended exchange offer, easing fears that the company would have to resort to bankruptcy. The shares jumped 40 cents, or 16 percent, to close at $2.90 on heavy volume of 20 million. Reaching a session high of $3, they reclaimed their highest level since June 2.

That's the day that Atlanta-based Mirant (MIR), in an effort to avoid bankruptcy, said it would offer to exchange unsecured debt with secured bonds. Subsequently, holders of subsidiary Mirant Americas Generation's debt filed a lawsuit to block the bond exchange. On Monday, Mirant said that 66.67 percent of Mirant Corp. bondholders support the exchange offers and a pre-packaged plan of reorganization. The company has asked creditors to approve the reorganization plan in the event it can't complete the bond exchange offer or refinance $3.45 billion of bank credit.

"With 10 business days to go in our offer, this amount of support from our bondholders is a crucial component of our effort to achieve a successful out-of-court restructuring," said President and CEO Marce Fuller, in a statement. "We are increasingly optimistic that we will reach the 85 percent minimum acceptance required from our bondholders." The amended offer calls for Mirant to exchange for each $1,000 principal amount of bonds: new $1,000 principal amount of secured bonds due in 2008; warrants to acquire 22.47 Mirant shares, and $5 in cash. The interest rate on the new debt would be 8.25 percent. Currently, rates are 2.5 percent on convertible notes due 2021 and 7.4 percent on senior notes due 2004.

For Mirant Americas Generation holders, Mirant is offering $1,000 principal amount of new secured debt with an interest rate of 8.25 percent. The current unsecured debt -- at 7.625 percent -- are currently due in 2006. Mirant would also pay $10 in cash per each $1,000 principal amount tendered into the exchange offer. As for the bank refinancing, Mirant has offered its bank lenders first-lien rights on up to $1.1 billion of debt. Mirant spokesman James Peters said the proposed facility, which would include $300 million owed by Mirant Americas Generation, would give creditors a priority lien ahead of the lien that has been proposed for banks and bondholders.

"That first-lien capacity will be available to support letters of credit as well as new financing, which will improve the company's liquidity," Mirant said in a statement. The exchange offers expire at midnight Eastern time on July 14.

[MeneMeneTekelUpharsin]

Failed to post this before, so here it is. In my OPINION, this company which has a lot of assets (unlike Enron) will be able to restructure its debt. If it does, the stock will rise significantly just like that of other power producers (i.e. Reliant -- RRI) who have done so this year. This is posted merely for the information of those who would like to do further research and as a favor. No further comment.

[Support Free Republic]

---

GOD BLESS OUR MILITARY AND THE UNITED STATES OF AMERICA
	Keep Our Republic Free Or mail checks to FreeRepublic , LLC PO BOX 9771 FRESNO, CA 93794 or you can use PayPal at Jimrob@psnw.com
STOP BY AND BUMP THE FUNDRAISER It's on the Breaking News Sidebar