Talen Energy Is Said to Seek Financing for Potential Bankruptcy

Talen Energy Corp. has held discussions with lenders for a loan that would fund a potential bankruptcy filing, according to people with knowledge of the matter.

The Riverstone-backed power producer with more than $4 billion of debt outstanding has been fielding proposals for a so-called debtor-in-possession loan, said the people, who asked not to be identified because they aren’t authorized to speak publicly.

Advisers representing creditor groups have signed confidentiality agreements to advance negotiations with management, they said. Talen is hunting for financing as higher gas prices increase its collateral needs, which drain liquidity, the people added.

Representatives for Talen ...