Bloomberg is reporting that the board of Baltimore's Constellation Energy Group favors a bid from Electricite de France that would kill the deal to sell CEG to Warren Buffett.

Baltimore's Constellation Energy Group Inc. is nearing an agreement to sell to Electricite de France SA half of its nuclear-power business for $4.5 billion and terminate a planned takeover of the entire company by Warren Buffett's MidAmerican Energy Holdings Co., according to a published report last night.

Bloomberg News, citing people familiar with the situation, said the parent company of Baltimore Gas and Electric favors the sale to Paris-based EDF, Constellation's largest shareholder and its partner in new nuclear development. The agreement is contingent on waivers of bank covenants and might be announced as early as this week, said one of the people, who declined to be identified because the talks are private, according to Bloomberg.

What are the "bank covenants" that would have to be waived?

A month ago CEG closed on a $1.23 billion line of credit with UBS and Royal Bank of Scotland. The loan contract prohibits Constellation from engaging in the "Sale of Assets, Etc. Sell, transfer, lease, assign or otherwise convey or dispose of assets (whether now owned or hereafter acquired) to an unrelated third party, in any single or series of transactions, whether or not related."

There are exceptions for ordinary-business asset sales, but the EDF deal, which would sell EDF half of CEG's nuclear-generation business for $4.5 billion, doesn't seem to fit the exceptions.