TerraForm Power refinances with $350 million term loan facility


Three weeks after it began shopping around for refinancing, yesterday solar and wind yieldco TerraForm Power (NASDAQ: TERP) announced that it has entered into a $350 million term loan credit facility with a consortium of seven banks.

TerraForm says that the monies borrowed under this facility will be used to pay off a portfolio term loan that a subsidiary entered into in 2015, as well as for general corporate purposes and the company’s working capital requirements.

The new loan will bear an interest rate of either the base rate plus a 1.75% margin, or a reserve adjusted Eurodollar rate plus a 2.75% margin, and will mature five years after the closing date of the facility.

Slightly less than one month ago Canadian asset manager Brookfield closed on its acquisition of a 51% stake in TerraForm. And Canada is where much of the new money is coming from as well, with several Canadian banks participating in the loan facility and Royal Bank of Canada serving as administrative agent and collateral agent.

The large majority of TerraForm’s 2.6 GW of assets are located in the United States, including wind and solar projects in 25 states and Puerto Rico. The yieldco also holds 145 MW of wind and solar in Ontario as well as solar plants in Chile and the UK.

Despite this significant refinancing TerraForm Power’s stock fell yesterday to $12.17 per share, the lowest level since the acquisition by Brookfield. This follows sluggish Q3 results released last week, in which TerraForm reported a $35 million net loss and cash available for distribution of only $25 million.

The company blames its poor Q3 performance largely on weaker than normal wind output, with total generation 13% lower than the third quarter of 2016.

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