Atlantic Power repriced its $470 million senior secured term loan and $200 million senior secured revolving credit facility at its APLP Holdings Limited Partnership subsidiary. Goldman Sachs led the group of arranging banks on the repricing.
The interest rate margin on the term loan and revolver was reduced by 25 basis points to LIBOR plus 275 basis points. The LIBOR floor remains at 1.00%. This re-pricing is the fourth for these facilities. Since the original financing in April 2016, the spread has been reduced a total of 225 basis points, from LIBOR plus 500 basis points to LIBOR plus 275.
Atlantic Power 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 latest re-pricing, the company expects to realize interest cost savings in 2019 of approximately $1.2 million. Cumulative savings through the maturity dates of the term loan (April 2023) and revolver (April 2022) are estimated to be approximately $3.25 million. The combined savings of the four re-pricing transactions (before transaction-related costs) is expected to be approximately $44.4 million over the terms of the facilities.
Atlantic Power expects to record fees related to this transaction in the fourth quarter of 2018.
“We were pleased to take advantage of strong market conditions and achieve a tighter spread on our term loan and revolver. This will further reduce our interest expense and benefit our cash flow,” said Terrence Ronan, executive vice president and chief financial officer of Atlantic Power.
Atlantic Power is an independent power producer that owns power generation assets in nine states in the United States and two provinces in Canada.
