Narrative
Full Description
Project narrative
On December 21, 2018, a syndicate of 10 banks — including the Bank of China (BOC) — entered into a $364.64 million USD syndicated loan agreement with Ares EIF Management, LLC — a Delaware-incorporated wholly-owned subsidiary of American private equity firm Ares Management Corporation — for the Phoenix Wind Portfolio Repowering Project. The loan was divided into two tranches: a $335.93 million USD construction bridge facility loan and a $28.71 million USD letter of credit tranche. The facility carried a maturity period of one year and nine months (1.75 years), a final maturity date of October 9, 2020, and an interest rate of LIBOR plus a margin of 112.5 basis points (bps). The proceeds were to be used by the borrower to finance the repowering of three Texas wind projects in the Phoenix Wind Portfolio that Ares EIF Management had acquired from BP Wind Energy North America concurrent with financial close: the existing 60 MW Silver Star I Wind Farm, located in Eastland and Erath Counties which went online in 2008, the 145 MW Sherbino II Wind Farm in Pecos County which went online in 2011, and the 225 MW Trinity Hills Wind Farm in Archer and Young Countries which went online in 2012, all selling their output to the Electric Reliability Council of Texas (ERCOT). All three wind farms would have their existing Clipper Windpower turbines replaced with Vestas blades and go into commercial operations in 2020. The Silver Star I repowering would turn it into a 48 MW facility. The Sherbino II repowering would turn it into a 128 MW facility. The Trinity Hills repowering would turn it into a 198 MW facility. All the repowering were completed and the facilities operational again in 2020. Silver Star I received $50.47 million USD in debt with $46.51 million USD from the bridge loan and $3.96 million USD from the letter of credit. Sherbino II received $130.64 million USD in debt with $120.74 million USD from the bridge facility and $9.90 million USD from the letter of credit. Trinity Hills received $183.53 million USD in debt with $168.68 million USD from the bridge facility and $14.85 million USD from the letter of credit. BOC contributed $29.99 million USD to the $335.93 million USD construction bridge facility loan. In addition to BOC, the following lenders contributed to the loan syndicate: Associated Bank, N.A. ($29.99 million USD), CoBank, ACB ($29.99 million USD), DNB ASA ($29.99 million USD), MUFG Bank, Ltd. ($35.92 million USD), Norddeutsche Landesbank Girozentrale (NORD/LB) ($45.00 million USD), Banco Santander, S.A. ($45.00 million USD), Siemens Financial Services GmbH (SFS) ($29.99 million USD), Société Générale S.A. (SocGen) ($29.99 million USD), and Sumitomo Mitsui Trust Bank, Limited (SMTB) ($29.99 million USD). MUFG Bank was the sole provider of the $28.71 million USD letter of credit tranche. MUFG, NORD/LB, and Santander served as coordinating lead arrangers. MUFG Bank served as bookrunner. In addition to the debt, Berkshire Hathaway Energy provided tax equity funding.
Staff comments
1. It is plausible, if not likely, that the specific borrower was a special purpose vehicle subsidiary of Ares EIF Management, LLC.