Northland Power Announces Signing of $465 Million Non-Recourse Debt Financing for EBSA Utility In Colombia
TORONTO, June 24, 2020 (GLOBE NEWSWIRE) -- Northland Power Inc. (“Northland” or “the Company”) (TSX: NPI) is pleased to announce the signing of an agreement for the permanent financing of its
distribution utility Empresa de Energía de Boyacá (EBSA) in Colombia for an aggregate amount of approximately $465 million, inclusive of a Canadian dollar tranche and a Colombian peso tranche. The
financing is expected to close in early July 2020.
The non-recourse debt financing is currently structured as a $450 million term loan and a $15 million debt service reserve credit facility, for an initial two-year term which, Northland expects to renew on an annual basis. The two facilities carry a blended interest rate of approximately 5.3% and provide Northland with the ability to right-size EBSA’s capital structure annually by increasing leverage commensurate with expected increases in Adjusted EBITDA. The non-recourse debt financing was provided by a syndicate of Canadian and international financial institutions and is not contingent upon the expected final tariff resolution for EBSA by local regulators.
The long-term financing plan for the acquisition of EBSA included: approximately $345 million of gross proceeds in common equity associated with the closing of the acquisition in January 2020; this non-recourse debt financing; and the balance funded through Northland’s corporate credit facilities. Northland intends to use the proceeds of the non-recourse debt financing to fully repay the outstanding acquisition bridge facility in the amount of $135 million and the existing local currency asset-level debt, with the remaining amount to be used to pay down borrowings on the Company’s revolving credit facility. After giving effect to the EBSA permanent financing, Northland expects to have over $550 million of liquidity available through its corporate credit facilities and cash on hand.
“We are pleased that we were able to structure and execute a flexible financing solution to support the long-term growth of EBSA,” said Pauline Alimchandani, Northland’s Chief Financial Officer. “Being able to secure our first ever non-recourse holdco level debt financing through the support of our strong lender relationships during the current market environment speaks to the quality of the asset, management team and the financial market’s confidence in Northland.”