Narrative
Full Description
Project narrative
On November 13, 2013, financial close was reached on a deal in which a syndicate of seven banks — including the New York Branch of the Industrial and Commercial Bank of China (ICBC) — entered into a $394.97 million USD syndicated loan agreement with Northeast Wind Capital II, LLC (NWC II) — a Delaware-incorporated special purpose vehicle (SPV) jointly owned by Delaware-incorporated Boston-headquartered American wind energy company First Wind Holdings, LLC, which is backed by private equity firms Madison Dearborn Capital Partners IV, L.P. and D. E. Shaw & Co., L.P. (51% equity stake) and Canadian utility Emera Inc. (49% equity stake) — for the 419 MW Northeast Wind Portfolio 2013 Refinancing Project. This loan was divided into two tranches: a $320.00 million USD first-lien term loan B tranche with a maturity period of seven years, a final maturity date of November 14, 2020, an interest rate of LIBOR plus a margin of 400 basis points (bps) (an effective interest rate of 7.348% as of December 31, 2013), principal and interest payable quarterly, and that was secured (i.e. collateralized); and a $74.97 million USD letter of credit tranche. The loan featured a sweep of 50% of excess cash, rising to 100% from 2017 if the sponsors failed to keep the portfolio proportion of contract revenues above 70%. The proceeds were to be used by the borrower to refinance its 419 MW wind power project portfolio in the states of Maine, Vermont, and New York, namely $300 million USD of outstanding project-level debt and a $150 million USD intercompany loan from Emera accrued when it purchased a 49% stake in NWC II in April 2011, allowing the sponsors to free up cash to use elsewhere. Each lender, including ICBC, contributed $45.71 million USD to the $320 million USD term loan B tranche. Each lender, including ICBC, contributed $10.71 million USD to the $74.97 million USD letter of credit tranche. AidData does not consider letters of credits to be flows. In addition to ICBC, the following lenders contributed to the loan syndicate: BNP Paribas S.A., CIT Finance, LLC, Goldman Sachs Bank USA, KeyBank, National Association, Morgan Stanley Senior Funding, Inc. and Union Bank, N.A.; all lenders served as joint lead arrangers and joint bookrunners. NWC II had initially launched a term loan B refinancing in July 2013, proposing a $325 million USD seven-year term loan B and a $60 million USD five-year first lien letter of credit, with a pricing of 350 bps above LIBOR. However, the deal failed to attract necessary interest, and was pulled by late August 2011. Then, in October 2013, NWC II launched the deal again with a higher pricing of 400 bps and slightly different terms, including the greater of 50% of excess cashflow sweep, bringing enough lenders to increase the term loan and letter of credit. The portfolio, developed by First Wind, consisted of the following assets: the 34 MW Bull Hill Project, the 42 MW Mars Hill Wind Farm, the 57 MW Stetson 1 Project, the 26 MW Stetson II Project, and the 60 MW Rollins Wind Project in Maine; the 40 MW Sheffield Wind Project in Vermont; the 20 MW Steel Winds I Project; the 15 MW Steel Winds II Project; and the 125 MW Cohocton Wind Farm Project (also known as Dutch Hill) in New York. NWC II also held 1,200 MW of prospective capacity.