FuelCell Energy entered into an $87 million non-recourse project financing facility. FuelCell used the proceeds to diversify its access to capital and to repay some of its existing indebtedness. The company may also use the funds to accelerate commercialization of its hydrogen fuel cell technologies and for other general corporate purposes.
The multi-bank term facility includes Investec Bank as coordinating lead arranger and sole bookrunner, BMO as mandated lead arranger, Liberty Bank as depositary agent and lender, and Connecticut Green Bank and Amalgamated Bank as lenders. The seven-year term financing package comprises an $80.5 million term loan and a $6.5 million debt service reserve letter of credit for a portfolio of six operating assets.
“At Investec, we have led more than $10 billion in energy and infrastructure project financings over the past five years, and this successful closing for FuelCell Energy evidences our continued commitment to help decarbonize the U.S. economy. We believe this financing strategy is ideal for FuelCell Energy, allowing the company to diversify its capital stack as well as access term project capital to support the growth of its business and operations of its existing assets,” Fred Petit, co-head of the North American power and infrastructure group at Investec, said.
“This facility enables FuelCell Energy to execute a more efficient financing structure by sensibly leveraging a portfolio of long-term contracted operating assets supported by investment-grade counterparties while attracting a diverse group of lenders and bringing material incremental cash back to FuelCell Energy. We are very pleased to have participation across this expanded bank group,” Michael Bishop, executive vice president and CFO of FuelCell Energy, said. “The seven-year term allows the company to navigate the current volatility in the fixed income markets and secure project financing at competitive pricing. FuelCell Energy is always looking to diversify our sources of capital while partnering with world class financial institutions such as those represented in this non-recourse facility.”
Proceeds to FuelCell following repayment of existing project debt were approximately $46.1 million of unrestricted cash and $14.5 million of restricted cash to fund performance reserves.
