Narrative
Full Description
Project narrative
On April 15, 2016, financial close was reached on a deal in which a syndicate of four banks — including the Industrial and Commercial Bank of China (ICBC), Citigroup, the Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), and JB Asset Management (JBAM) — entered into a $725.00 million USD syndicated loan agreement with EIF-NEC, LLC — a Delaware-incorporated special purpose vehicle jointly owned by EIF United States Power Fund IV, L.P. (50% equity stake) and United States Power Fund III, L.P. (50% equity stake) private equity funds managed by Energy Investors Funds (EIF), a New York private equity firm acquired by American investment management firm Ares Management Corporation in 2014 — for the 705 MW Newark Energy Center (NEC) 2016 Refinancing Project. This loan was divided into two tranches: a $50.00 million USD letter of credit tranche with a maturity period of five years, a final maturity date of April 15, 2021, and an interest rate of LIBOR plus a reported margin of about 500 basis points (bps); and a $675.00 million USD senior secured Term Loan B tranche with a maturity period of seven years, a final maturity date of April 15, 2023, and an interest rate based on LIBOR plus a reported margin of about 500 bps. ICBC contributed $15.00 million USD, Citigroup contributed $18.00 million USD, and BTMU contributed $17.00 million USD to the $50 million USD letter of credit tranche; AidData does not consider letters of credit to be flows. ICBC contributed $135.00 million USD to the $675 million USD Term Loan B tranche as captured by Record ID#105368, while Citigroup, JBAM, and BTMU each contributed $180.00 million USD. The South Korean portion was sold to other institutions, with ING Life Insurance, National Credit Union Foundation of Korea, and Shinhan Capital acquiring portions from NH Investment & Securities, completed in August 2016. The proceeds were to be used by the borrower to refinance the 705 MW Newark Energy Center (NEC), a combined-cycle gas-fired power plant located in Newark, Essex County, New Jersey part of the PJM Interconnection market; specifically, the proceeds were to be used to replace bank debt, $578 million USD of bank financing closed in June 2014 used for the construction of NEC and an acquisition of a 50% stake in the project from Hess (EIF-NEC already holding a 50% stake), and to pay an upstream distribution. NEC began operations in September 2014. It provides power to about 700,000 homes The borrower began to pursue refinancing in July 2015, but that deal did not progress. It then pursued a deal to appeal to global investor networks, including in South Korea. In 2023, due to Hartee Partners' acquisition of NEC, the lenders entered into an amendment agreement with EIF-NEC, LLC; in the agreement, the lenders extended the maturity period of the loan by 100 days (0.274 years, to August 3, 2023) — a new maturity period of 7.274 years — of the $675 million USD tranche in exchange for a payment-in-kind (PIK) payment. Record ID#105370 captures ICBC's contribution to this debt rescheduling. Upon closing of the acquisition in August 2023, the borrower repaid the lenders full at par, including the PIK payment agreed in the amendment
Staff comments
1. A 6-month LIBOR rate was assumed. The average 6-month LIBOR rate for April 2016 was 0.90254%. Therefore, for the time being, AidData has coded the interest rate as 0.90254% + 5.00% (500 bps) = 5.90254%.