Dynegy Inc. has completed a new $1.3 billion credit facility consisting of a $700 million revolving credit facility that matures in May 2007 and a $600 million term loan that matures in May 2010.

The lead arrangers, Banc of America Securities LLC, Citigroup Global Markets Inc., Credit Suisse First Boston, J.P. Morgan Securities Inc. and Lehman Brothers Inc., committed $625 million in aggregate toward the revolving credit portion of the new credit facility. In addition, Morgan Stanley Senior Funding Inc. and Merrill Lynch Capital Corp. joined the lead arrangers of the transaction and committed $75 million in aggregate to complete the revolving credit facility target amount of $700 million.

“The substantial commitments by our five lead arrangers, as well as the addition of Morgan Stanley and Merrill Lynch to the Dynegy bank team, reflect the significant progress we have made to restore the confidence of the financial community through our self-restructuring program,” said CEO Bruce A. Williamson. “Through their commitments, these seven institutions are demonstrating their belief in our company and, importantly, their desire to be a part of Dynegy’s future.”

Williamson said that “by accomplishing this important financial milestone now, we reduce future refinancing risk and extend our maturity runway to help the company capitalize on continued improvements in the U.S. economy and a return to a stronger power price environment. This will further position Dynegy for growth opportunities in the sector as they materialize.”

The revolving credit facility will be undrawn at closing and is available for letters of credit and general corporate purposes. Of the $600 million in proceeds from the term loan that will be drawn at closing, approximately $190 million will be used to repay indebtedness and to pay fees and expenses associated with the new credit facility. The remaining drawn proceeds are available to be used for general corporate purposes.

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