Investment-banker Paul Beck has "a lot of hope" for the future of mezzanine lending in the energy industry. Beck is the executive vice president of the new Macquarie Energy Capital business in Houston, part of the Sydney, Australia-based Macquarie Bank Group. Macquarie has begun lending money to the upstream oil and gas business, including elusive mezzanine capital. And Macquarie is not alone in filling the mezzanine-lending void created when such high-profile companies as Mirant, Aquila, Enron and Shell left the market in 2001 and last year. Another player, Duke Energy Capital, is being closed now. Its parent, Duke Energy, announced at press time that the existing portfolio would be sold or held through maturity. Rob Lindermanis, formerly of Mirant Energy Capital, and Michael Keener, formerly of Shell Capital, have formed Petrobridge Investment Management LLC in Houston, to provide equity and mezzanine debt financing to independent producers. And mezzanine lender TCW currently is raising a new fund, Beck told Houston Energy Finance Group members recently. Other names associated with mezzanine lending include Wells Fargo and BlackRock Energy Capital, which was formed last year by former Range Resources Producer Finance colleagues. However, Beck sees mezzanine lending occurring a little differently this time around. He foresees fewer deals featuring sole underwriters, and more in which several lenders work together. Macquarie teamed with Petrobridge to provide the recent funding for a private Houston-based producer to acquire a 50% interest in a Gulf of Mexico property. Macquarie is targeting deals in the $10- to $100-million range and will invest in debt and equity at the corporate and project level, including structured and project finance, corporate restructurings and recapitalizations, mezzanine debt, subordinated debt and equity capital. (For more on this and other capital providers, see the cover story "Private Capital" in this issue.) -Jodi Wetuski
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