ICBC contributes to a $312.5 million USD syndicated loan for the 594 MW Rhode Island State Energy Center (RISEC) 2022 Refinancing Project (Linked to Record ID#105220)

Project narrative

On December 17, 2015, financial close was reached on a deal in which a syndicate of three banks — the Industrial and Commercial Bank of China (ICBC), GE Energy Financial Services (EFS), and Morgan Stanley — entered into a $375.00 million USD syndicated loan agreement with Entergy Rhode Island State Energy, L.P. — a Delaware-incorporated special and bankruptcy-remote purpose vehicle (SPV) jointly owned by Carlyle Power Opportunities Capital Partners L.P. (50% equity stake) and Carlyle Power Partners II L.P. (50% equity stake) and formerly a wholly-owned subsidiary of Entergy Corporation — for the 583 MW Rhode Island State Energy Center (RISEC) Acquisition Project by the Carlyle Group. This loan was divided into two tranches: a $50.00 million USD senior secured revolving credit facility (RCF) tranche with a maturity period of five years; and a $325.00 million USD senior secured Term Loan B tranche with a maturity period of seven years, a final maturity date of December 17, 2022, and an interest rate of LIBOR plus a margin of 475 basis points (bps). Amortization was conservative on the debt, with the borrower obligated to meet either its debt reduction target every year or sweep 75% of cash towards debt reduction (which was greater) and have a minimal 1% mandatory amortization for the term loan. 40% of the term loan was expected to be outstanding at maturity. The loan carried carried a financial covenant that the borrower's debt-service coverage ratio (DSCR) be 1.1x. ICBC contributed $15.00 million USD to the $50 million USD RCF tranche, captured by Record ID#105215. ICBC contributed $75.00 million USD to the $325 million USD Term Loan B tranche, captured by Record ID#105216. The proceeds of the $325 million USD Term Loan B tranche were to be used to partly finance the Carlyle Group's acquisition of a 100% stake in Entergy Rhode Island State Energy, L.P. and its asset, the 583 MW combined cycle gas turbine Rhode Island State Energy Center (RISEC) in Johnston, Rhode Island operated by NextEra Energy, while the proceeds of the $50 million USD RCF tranche were to be used for working capital purposes related to the acquisition. In addition to the debt, Carlyle Power Opportunities Capital Partners and Carlyle Power Partners II each provided $103.5 million USD in equity ($207 million USD in total) for the $490.00 million USD acquisition. In early October 2015, Carlyle Group entered into an agreement to purchase the RISEC for $490 million USD from Entergy Corporation, with the acquisition expected to be completed by the end of the year subject to approval from the Federal Energy Regulatory Commission and antitrust laws. The acquisition was completed on December 17, 2015. After the acquisition, Entergy Rhode Island State Energy, L.P. was renamed Rhode Island State Energy Center L.P.. Then, on July 20, 2018, financial close was reached on a deal in which a syndicate of at least 15 banks — including China Merchants Bank Co., Ltd. and ICBC — entered into a $363.00 million USD syndicated senior secured loan agreement with Rhode Island State Energy Center L.P. for the 594 MW Rhode Island State Energy Center (RISEC) 2018 Refinancing Project. This loan was divided into two tranches: a $318.00 million USD Term Loan A tranche with a maturity period of seven years, a final maturity date of July 20, 2025, and an interest rate of LIBOR plus a margin of 275 bps; and a $45 million USD revolver tranche with a maturity period of seven years and a final maturity date of July 20, 2025. The loan included a "hedge toggle" feature which automatically adjusted the interest margin dependent on whether future revenues were supported by a power hedge or other contractual agreement, with an increase of 100 bps if Carlyle did not extend the contracted revenues beyond its existing tolling agreement with Shell Energy North America expiring in December 2021. The proceeds were to be used by the borrower to refinance the now-594 MW RISEC; specifically, the proceeds were used to refinance the $375 million USD syndicated loan used by the borrower to acquire the RISEC, with the $45 million USD revolver meant to satisfy debt service reserve requirements, letter of credits obligations, and working capital needs. Four lenders, including China Merchants Bank, each contributed $11.25 million USD to the $45 million USD revolver tranche, as captured by Record ID#105217. China Merchants Bank contributed $13.75 million USD and ICBC contributed $25.00 million USD to the $318 million USD Term Loan A tranche. China Merchants Bank's contribution is captured by Record ID#105218. ICBC's contribution is captured by Record ID#105219 {see ID#206506}}. On December 23, 2019, financial close was reached on a deal in which a syndicate of four banks — not known to include any Chinese state-owned banks — entered into a $329.00 million USD syndicated loan and amendment-and-extension agreement with Rhode Island State Energy Center L.P. for the 594 MW Rhode Island State Energy Center (RISEC) 2019 Refinancing Project. This amend-and-extend loan of the $363 million USD loan was divided into two tranches: a $284 million USD Term Loan A tranche and a $45 million USD revolver tranche, both with a maturity period of seven years and a final maturity date of December 23, 2026 and an interest rate of LIBOR plus a margin of 250 bps. The loan included a "hedge toggle" feature which automatically adjusted the interest margin dependent on whether future revenues were supported by a power hedge or other contractual agreement. The proceeds of this amend-and-extend deal were used by the borrower to refinance the July 2018 $363 million USD loan. Then, on February 2, 2022, financial close was reached on a deal in which a syndicate of 16 banks — including China Merchants Bank and ICBC — entered into a $312.5 million USD syndicated loan and amendment-and-extension agreement with Rhode Island State Energy Center L.P. for the 594 MW Rhode Island State Energy Center (RISEC) 2022 Refinancing Project. This amend-and-extend loan of the $329 million USD loan was divided into two tranches: a $267.5 million USD Term Loan A tranche and a $45 million USD revolving credit facility (RCF) tranche. This loan carried a maturity period of seven years and an interest rate of SOFR plus a margin of 250 bps. The loan included a "hedge toggle" feature which automatically adjusted the interest margin dependent on whether future revenues were supported by a power hedge or other contractual agreement. The proceeds of this extend-and-extend deal were used by the borrower to refinance the December 2019 $329 million USD debt syndicated loan for RISEC. Record ID#105220 captures China Merchants Bank's contribution. Record ID#105221 captures ICBC's contribution. In addition to China Merchants Bank and ICBC, the following lenders contributed to the loan syndicate: Capital One Bank, CoBank, Crédit Agricole Group, East West Bank, FirstBank Puerto Rico, Investec Bank, KEB Hana Bank, Kookmin Bank, MUFG Bank, an unspecified bank based in the United States, Regions Bank, Siemens Financial Services GmbH (SFS), Sumitomo Mitsui Banking Corporation (SMBC), and Zions Bancorporation. Investec served as the sole bookrunner.