InterGen

InterGen N.V. is a global power generation platform in Europe, Australasia and Mexico. Highstar invested in InterGen in August 2005 and sold its investment in October 2008. Highstar controlled a 50% interest in InterGen with a financial partner invited by Highstar to participate in this investment. Highstar also created a successful co-investment program in InterGen.

Highstar's Value-Add

Debt Management Expertise:

One of Highstar's key initiatives at InterGen was the implementation of a more efficient corporate and project-level capital structure than existed at the time Highstar invested in the business. This required significant financial and accounting work and preparation. In addition, InterGen had serious operational problems in its Australian plants that needed to be resolved. Moreover, we needed time to prove to lenders that the operating problems at InterGen's UK plants, which existed prior to Highstar's investment, were behind the company before we could go to market.

Once InterGen was ready, we initiated a highly successful, award winning $3.4 billion corporate-level refinancing that closed in July 2007. This transaction refinanced earlier project financings at the company's three UK and La Rosita (Mexico) power plants, eliminating structural subordination and freeing significant cash that had been trapped at the plant level. The refinancing also provided InterGen with a flexible, efficient, long term capital structure with the ability to: (i) fund future acquisitions and other growth opportunities, and (ii) meet reasonably foreseeable working capital and other liquidity needs.

The transaction was syndicated and closed amid highly turbulent debt markets with no additional covenants and only modest pricing flex relative to other debt offerings then in the market. The transaction earned the 2007 IFR European High Yield Bond of the Year Award. The completion of the refinancing as the bank and bond markets were shutting down globally, combined with Highstar-directed initiatives to reduce operating risk and grow InterGen's asset base through development and accretive M&A activity, enabled Highstar to subsequently manage a complex sale process to realize significant value upon exit in October 2008.