Atlantic Power amended its credit facilities, consisting of the $380 million senior secured term loan and the $200 million senior secured revolving credit facility.
Both the term loan and the revolver are at the company’s APLP Holdings Limited Partnership subsidiary.
“We are pleased to complete the re-pricing and amendment of our term loan and revolver. Due to a strong market, the efforts of our Atlantic Power team and the support of our lead arranger, Goldman Sachs, we were able to achieve significant positive changes, including improvements to both pricing and terms,” said Terrence Ronan, executive vice president and chief financial officer of Atlantic Power.
“Our track record of delivering upon what we say regarding debt reduction has made us an attractive credit in the markets and helped us to achieve this outcome.”
Under the amendment, the interest rate margin on both the term loan and the revolver has been reduced 25 basis points, to LIBOR plus 250 basis points. The margin would be reduced another 25 basis points if the Company achieves a leverage ratio of 2.75 times. In addition, the targeted debt balances have been modified to reflect the anticipated closing of the Manchief sale in 2022. As a result, targeted debt repayment is lower in 2020 and higher in 2022 as compared to the previous schedule. The maturity date of the Term Loan has been extended two years to April 2025. The Revolver maturity date of April 2022 is unaffected by the amendment.
The fees associated with this amendment were in line with those incurred by the company on earlier re-pricing transactions. The company expects to record this expense in the first quarter of 2020.
“This amendment comes at the end of a multi-year effort to restructure and strengthen our balance sheet, which has resulted in an improved credit profile. Including the most recent upgrade by S&P, our credit ratings have been raised two notches by both Moody’s and S&P over the past four-plus years,” said James J. Moore, Jr., president and chief executive officer of Atlantic Power.
“We are now in a position to fully amortize the term loan by its maturity date using our strong operating cash flow.”
According to a related 8-K filing, Goldman Sachs also served as administrative agent.
Atlantic Power is an independent power producer that owns power generation assets in eleven states in the United States and two provinces in Canada.
