DEDHAM, Mass., Oct. 19, 2017 /PRNewswire/ -- Atlantic Power
Corporation (NYSE: AT) (TSX: ATP) ("Atlantic Power" or the
"Company") announced today a repricing of the $563 million senior secured term loan ("term
loan") and $200 million senior
secured revolving credit facility ("revolver") at its APLP Holdings
Limited Partnership ("APLP Holdings") subsidiary, via a group of
arranging banks led by Goldman Sachs Lending Partners LLC.
The repricing became effective October
18, 2017. The interest rate margin on the term loan
and revolver was reduced by 75 basis points to LIBOR plus 350 basis
points. The LIBOR floor remains at 1.00%. This
repricing is the second for these facilities; since the original
financing in April 2016, the spread
has been reduced 150 basis points, from LIBOR plus 500 basis points
to LIBOR plus 350.
The Company is permitted to prepay the term loan in the first
six months following this transaction at a 1% premium.
Following the six-month period, prepayment is permitted at
par. The mandatory 1% annual amortization and cash sweep
provisions of the term loan are unchanged.
As a result of this repricing, the Company expects to realize
interest cost savings in 2018 of approximately $4 million. Cumulative savings through the
maturity dates of the term loan (April
2023) and revolver (April
2021) are estimated to be approximately $15 million. The combined savings of both
repricing transactions is expected to be approximately $33 million over the terms of the
facilities.
The Company expects to record fees related to this transaction
in the fourth quarter similar to those recorded in the second
quarter related to the April 2017
repricing of the term loan and
revolver.
Separately, on October 12, 2017,
the Company repaid the $54.6 million
non-recourse project debt outstanding at its Piedmont plant. This debt had been
scheduled to mature in August 2018. Annual interest cost
savings from repayment of this 8.1% debt are approximately
$4.5 million. The Company used
$59.6 million of discretionary cash
and $4.5 million of project-level
cash (previously classified as restricted) in repayment of the
debt, payment of accrued interest, and interest rate swap breakage
costs.
"The additional reduction in the spread on our term loan and
revolver and our recent credit rating upgrade by Moody's all
reflect the progress we have made in reducing our leverage, which
we expect will continue," said Terrence
Ronan, Executive Vice President and Chief Financial Officer
of Atlantic Power. "Our decision to repay the Piedmont maturity from discretionary cash
brings total debt repayment expected in 2017 to approximately
$166 million."
"The progress we have made in reducing debt, interest expense
and overheads is providing us increased financial flexibility.
The $8.5 million of interest
cost savings from the recent repricing of our term loan and
revolver and the repayment of Piedmont debt brings the total reduction in
interest and overhead expenses achieved from our restructuring
efforts over the past several years to nearly $100 million on an annualized basis," said
James J. Moore, President and CEO of
Atlantic Power. "We chose to allocate some of our
approximately $250 million of
liquidity to repayment of the existing project debt at Piedmont, which had been costing us 8%.
We will retain ownership of Piedmont, which is generating improved Project
Adjusted EBITDA of $9 to $10 million
annually due to the work of our operations and asset management
teams. The Power Purchase Agreement for Piedmont runs to 2032, is with an A-rated
counterparty, and will help to underpin our long-term cash
flows."
About Atlantic Power
Atlantic Power owns and operates a diverse fleet of twenty-three
power generation assets across nine states in the United States and two provinces in
Canada. The Company's power generation projects sell
electricity to utilities and other large commercial customers
largely under long-term power purchase agreements, which seek to
minimize exposure to changes in commodity prices. The
aggregate gross electric generation capacity of this portfolio is
approximately 2,138 megawatts (MW), and the Company's aggregate net
ownership interest is approximately 1,500 MW. Nineteen of the
projects are currently operational, totaling 1,975 MW on a gross
capacity basis and 1,337 MW on a net ownership basis. The
remaining four projects, all in Ontario, are not operational, three due to
revised contractual arrangements with the offtaker and the other,
Tunis, has a forward-starting
15-year contractual agreement that will commence between
November 2017 and June
2019.
Atlantic Power's shares trade on the New York Stock Exchange
under the symbol AT and on the Toronto Stock Exchange under the
symbol ATP. For more information, please visit the Company's
website at www.atlanticpower.com or contact:
Atlantic Power Corporation
Investor Relations
(617) 977-2700
info@atlanticpower.com
Copies of the Company's financial data and other publicly filed
documents are available on SEDAR at www.sedar.com or on EDGAR at
www.sec.gov/edgar.shtml under "Atlantic Power Corporation" or on
the Company's website.
Cautionary Note Regarding Forward-Looking Statements
To the extent any statements made in this news release contain
information that is not historical, these statements are
forward-looking statements within the meaning of Section 27A of the
U.S. Securities Act of 1933, as amended, and Section 21E of the
U.S. Securities Exchange Act of 1934, as amended, and under
Canadian securities law (collectively, "forward-looking
statements").
Certain statements in this news release may constitute
"forward-looking statements", which reflect the expectations of
management regarding the future growth, results of operations,
performance and business prospects and opportunities of the Company
and its projects. These statements, which are based on
certain assumptions and describe the Company's future plans,
strategies and expectations, can generally be identified by the use
of the words "may," "will," "project," "continue," "believe,"
"intend," "anticipate," "expect" or similar expressions that are
predictions of or indicate future events or trends and which do not
relate solely to present or historical matters. Examples of
such statements in this press release include, but are not limited,
to statements with respect to the following:
- the Company's estimate of interest cost savings associated with
the October 2017 repricing of its
term loan and revolver of approximately $4
million in 2018 and $15
million over the terms of the facilities;
- the Company's estimate of interest cost savings associated with
the October 2017 and April 2017 repricings on a combined basis of
approximately $33 million over the
terms of the facilities;
- the Company's expectation that the fees related to the
October 2017 repricing to be recorded
in the fourth quarter will be similar to those recorded in the
second quarter related to the April
2017 repricing;
- the Company's estimate of interest cost savings of
approximately $4.5 million annually
resulting from the repayment of debt at its Piedmont plant;
- the Company's expectation that reduction in its leverage will
continue;
- the Company's estimate of approximately $166 million in total debt repayment in
2017;
- the Company's estimate of the amount of Project Adjusted EBITDA
generated by Piedmont, and
- the Company's expectation that the Power Purchase Agreement for
Piedmont is expected to help
underpin its long-term cash flows.
Forward-looking statements involve significant risks and
uncertainties, should not be read as guarantees of future
performance or results, and will not necessarily be accurate
indications of whether or not or the times at or by which such
performance or results will be achieved. Please refer to the
factors discussed under "Risk Factors" and "Forward-Looking
Information" in the Company's periodic reports as filed with the
U.S. Securities and Exchange Commission (the "SEC") from time to
time for a detailed discussion of the risks and uncertainties
affecting the Company. Although the forward-looking
statements contained in this news release are based upon what are
believed to be reasonable assumptions, investors cannot be assured
that actual results will be consistent with these forward-looking
statements, and the differences may be material. These
forward-looking statements are made as of the date of this news
release and, except as expressly required by applicable law, the
Company assumes no obligation to update or revise them to reflect
new events or circumstances.
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SOURCE Atlantic Power Corporation