Renewable energy company Boralex refinanced almost all of its wind farm operations in France for a total of $1.7 billion divided among three credit agreements maturing respectively in 2034, 2036 and 2040.
The transaction immediately makes available financial resources totaling more than $178 million, achieved primarily by grouping together assets that were previously financed individually through 30 different credit agreements.
This amount will be used to reduce Boralex’s existing corporate credit facility, resulting in greater capacity to fund the development of future projects across the corporation. In addition to the amount made available in the corporate credit facility, the financing includes $200 million for the construction of short-term projects. Furthermore, an additional $180 million tranche to finance the construction of future projects should become available in early 2020 once the necessary documents have been finalized.
Beyond the benefits stemming from the more favorable market conditions, this new revolving tranche will accelerate the development of Boralex’s future projects. When built, these projects will be added to the portfolio of projects benefiting from the terms of the refinancing arrangement. Taking advantage of the very good conditions on the European debt market, this refinancing arrangement reduces Boralex’s average interest rate for these assets and projects by 95 basis points, from 2.70% to 1.75%. This rate reduction, coupled with the optimization of its capital structure, will reduce the corporation’s consolidated annual interest expense by $15 million (12%).
Lastly, estimated net non-recurring expenses of $17 million related mainly to penalties for early repayment will be recorded in the 2019 fourth quarter results.
“This refinancing is a major step forward that will free up significant financial resources and reduce the cost of implementing our strategic plan,” said Bruno Guilmette, vice president and chief financial officer of Boralex. “This refinancing operation increases our financial flexibility and creates an even stronger bond with our European financial partners, who have all expressed great confidence in our leadership and business model, for which I thank them.”
“I’d like to thank the banks and our advisors for being such solid partners in this complex undertaking,” said Nicolas Wolff, vice president and general manager of Boralex Europe. “The success of this refinancing arrangement, the largest in the renewable energy and wind sectors in France, is an expression of confidence in the future of Boralex and more broadly in the renewable energy sector.”
Having had a special relationship with the Boralex Group for many years, CIC, Bpifrance, Crédit Agricole, represented by Crédit Agricole Corporate and Investment Bank and Unifergie, along with the Caisse Régionale Nord de France, CaixaBank, and La Banque Postale jointly arranged the financing for this transaction.
Law firms De Pardieu, Brocas, Maffei and Linklaters as well as financial advisors Messier Maris, Ester and KPMG advised the company.
Boralex develops, builds and operates renewable energy power facilities in Canada, France, the UK and the U.S.