TerraForm Power closes $1.2 billion bond deal


Well, that was fast.

Fifteen days after it announced it would be seeking a $1.2 billion bond issue to pay off $950 million in notes scheduled to come due in 2023, TerraForm Power closed on the deal. The new bonds will become due in 2028, according to the Securities and Exchange Commission filing accompanying this announcement.

TerraForm Power only recently emerged from its struggle to disentangle itself from its former sponsor, SunEdison, when that company went bankrupt. On October 18 the company moved to a new sponsor, with Canadian asset manager Brookfield acquiring a majority stake in the yieldco.

The company has been on a cash-acquisition binge of late,  closing on a $350 million term loan credit facility in mid-November. That money will go toward paying off a portfolio loan one of its subsidiaries had taken out.

When TerraForm first announced that it was seeking this issue, Mercom Capital CEO Raj Prabhu explained that the Brookfield transaction probably helped TerraForm get better terms on its latest round of financing.

“You are not going to do a billion dollars and pay more,” Mercom Capital CEO Raj Prabhu told pv magazine. “For an extra $50 million, you are not going to go through all these hoops.”

The 2028 bonds are financed at an interest rate 5% each year and mature on January 31, 2028. TerraForm will pay interest on January 31 and July 31 for the term of the bonds. The first payement is due July 31, 2018.

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