ICBC contributes $95 million USD to $600 million USD term loan tranche of a $730 million syndicated debt financing package for the 647 MW Salem Harbor Station Power Plant Project

Project narrative

On January 9, 2015, financial close was reached on a deal in which a syndicate of 10 lenders — including the Industrial and Commercial Bank of China (ICBC) — entered into a $730 million USD syndicated loan with Footprint Power Salem Harbor Development Company LP (DevCo) — a special purpose vehicle (SPV), owned by Highstar Capital IV, L.P., and the funds affiliated with it, which are industrial infrastructure investors managed by Oaktree Capital Management, L.P., an American global asset management firm (87.5%) and an affiliated company of Toyota Tsusho Corporation (12.5%) — for the 647 MW Salem Harbor Station CCGT Power Plant Project. The facility was divided into two tranches: a $130 million USD letter of credit tranche which carried a maturity period of eight years and a final maturity date of January 9, 2023 and a $600 million USD term loan tranche which carried a maturity period of seven years and a final maturity date of January 9, 2022. Both tranches were priced at 325 basis points (bps) (3.25%) over LIBOR with a 25 bp (.25%) step-up at 6 months, and another at 42 months. The financing will be used to develop a 674 MW combined-cycle power plant in Salem, Massachusetts. Record ID#107918 captures ICBC's $95 million USD contribution to the $600 million USD term loan tranche. The following lenders also contributed the following amounts: BNP Paribas S.A. ($65.29 million USD), Credit Agricole Group ($59.51 million USD), GE Energy Financial Services ($69.47 million USD), Mitsubishi UFJ Financial Group ($47.05 million USD), Mizuho Financial Group ($56.87 million USD), NordLB ($52.43 million USD), Royal Bank of Scotland ($61.47 million USD), Sumitomo Mitsui Banking Corporation ($31.46 million USD), and SunTrust Bank ($61.47 million USD). ICBC did not contribute to the $130 million USD letter of credit tranche. The proceeds would be used by the borrower to 674 MW Salem Harbor Station is a combined-cycle gas turbine (CCGT) power plant in Salem, Massachusetts. Footprint Power purchased the coal-fired power plant, also called Salem Harbor Station, on the site in 2012, and brought the coal plant offline in 2014.The natural-gas fired plant was then built around the out-of-date coal plant. The demolition of the coal plant was completed in 2016 and the power plant became operational, nearly a year after it was scheduled to, in late May 2018. The Salem Harbor plant was contracted to provide power to ISO-New England Inc. (ISO-NE), the non-profit organization responsible for managing the New England electrical grid and power market, beginning June 1, 2017. Due to the year-long delay in operations, DevCo was penalized by ISO-New England in cases wherein the power needs of the area were not sufficiently met. In December 2019, the facility was amended to terminate the letter of credit tranche and reduce the term loan tranche. Iberdrola Energy Projects Inc. (IEP) was named engineering, procurement and construction (EPC) contractor in December 2014. Although IEP completed most of the work, DevCo terminated the EPC contract in April 2018 over disputes during the construction process, delays in construction, and overrun costs. IEP sued DevCo over wrongful termination of the EPC contract and won the suit. IEP was awarded $237 million USD in arbitration costs, and the ruling caused the borrower to default on the construction facility. Then, in late March, 2022 Footprint Power Salem Harbor Development LP filed for Chapter 11 bankruptcy in Delaware. In April 2023, Castleton Commodities International took over a majority stake in the plant.