BOSTON, April 2, 2012 /PRNewswire/ -- Atlantic Power
Corporation (the "Company") today announced the purchase of an
additional 48% interest in the Company's Canadian Hills wind power
project in Oklahoma (the
"Project") and the close of a $310
million non-recourse, project-level construction financing
facility for the $470 million
Project, for which Morgan Stanley serves as sole lead
arranger. The financing includes a $290 million construction loan and a $20 million 5-year letter of credit
facility. The construction loan is structured to be repaid by
a tax equity investment when the Project commences commercial
operations. With this closing, the Company owns 99% of the
Project and is committed to investing approximately $180 million of equity (net of financing costs)
following the funding of the construction financing.
Morgan Stanley is also providing bridge financing commitments
that backstop the Company's equity investment and a portion of the
tax equity investments.
Canadian Hills is an approximately 300 MW wind power project
located near El Reno, Oklahoma, 20
miles west of Oklahoma City,
Oklahoma. The Project was developed by Apex Wind Energy
Holdings, LLC ("Apex"), a leading wind energy company based in
Charlottesville, Virginia. Apex will retain a 1% interest in
the Project. Apex will manage construction of the Project and
the Company will oversee operations and be the asset
manager. The Project is expected to generate enough clean,
renewable energy to power the equivalent of over 100,000 homes.
"Our investment in Canadian Hills is a significant milestone in
the continued growth of the Company", commented Barry Welch, President and CEO of Atlantic
Power. "We were able to leverage our strong industry
expertise to secure and finance a transaction that will increase
our net MW ownership by 13% and provide steady, accretive cash
flows over the next twenty years. The investment will
increase the Company's average remaining power purchase agreement
life from 8.3 years to 9.9 years and increase the wind segment of
our net generating capacity from 3% to 15% while reducing the gas
segment from 77% to 68%."
Construction under the terms of a fixed-price, balance of plant
contract will begin immediately and the Company expects the Project
to be fully operational by November 2012. The Company's
equity contributions are expected to be drawn following
disbursement of the construction loan, and is anticipated to be a
combination of convertible debentures and common equity. The
Company has the ability to use its existing revolving credit
facility and the approximately $360
million bridge facility from Morgan Stanley to provide
flexibility in the timing of the tax equity and permanent capital
raise. Upon commencement of commercial operations of the
Project, the construction loan is expected to be fully repaid by
the tax equity investment. Cash distributions to the Company
from the Project are expected to average $16
to $19 million for each full year of operation through 2020,
which is net of the portion of the cash allocated to tax
equity. Following completion, the Project will also have a
positive impact on reducing the Company's consolidated leverage and
improving credit metrics such as consolidated debt to EBITDA.
The Project has long-term power purchase agreements for 100% of
its output with Southwestern Electric Power Company, Oklahoma
Municipal Power Authority, and Grand River Dam Authority. The
Project will deploy Mitsubishi 2.4 MW MWT102 and REpower 2.05 MW
MM92 wind turbines, both proven technologies that take advantage of
the Project's strong wind regime.
About Atlantic Power
Atlantic Power is a leading publicly traded, power generation
and infrastructure company with a well diversified portfolio of
assets in the United States and
Canada. The Company's power
generation projects sell electricity to utilities and other large
commercial customers under long-term power purchase agreements,
which seek to minimize exposure to changes in commodity prices.
The net generating capacity of the Company's projects is
approximately 2,140 MW, consisting of interests in 31 operational
power generation projects across 11 states and 2 provinces.
The Company also has one 53 MW biomass project under
construction in Georgia, one
approximately 300 MW wind project in Oklahoma, which is expected to start
construction in April 2012, and an
84-mile, 500 kilovolt electric transmission line located in
California. Atlantic Power also
owns a majority interest in Rollcast Energy, a biomass power plant
developer in Charlotte, NC. Atlantic Power is incorporated in
British Columbia, headquartered in
Boston and has offices in
Chicago, Toronto, Vancouver and San
Diego.
Atlantic Power's corporate strategy is to increase the value of
the company through accretive acquisitions in North American
markets while generating stable, contracted cash flows from its
existing assets to sustain its dividend payout to shareholders. The
Company's dividend is currently paid monthly at an annual rate of
Cdn$1.15 per share.
Atlantic Power has a market capitalization of approximately
$1.6 billion and trades on the New
York Stock Exchange under the symbol AT and on the Toronto Stock
Exchange under the symbol ATP. For more information, please
visit the Company's website at www.atlanticpower.com or
contact:
Atlantic Power Corporation
Amanda Wagemaker, Investor
Relations
(617) 977-2700
info@atlanticpower.com
Copies of financial data and other publicly filed documents are
filed on SEDAR at www.sedar.com or on EDGAR at
www.sec.gov/edgar.shtml under "Atlantic Power Corporation" or on
the Company's website.
- Certain statements in this news release may constitute
"forward-looking statements", which reflect the expectations of the
Company regarding the Company's expectations about its investment
in Canadian Hills. Such forward-looking statements reflect
current expectations regarding future events and operating
performance and speak only as of the date of this news
release. Such forward-looking statements are based on a
number of assumptions which may prove to be incorrect, including,
but not limited to
- the assumption that construction of the Project will start
immediately;
- the assumption that the Project will be fully operational by
November 2012;
- the assumption that the construction loan will be repaid by tax
equity investment when the Project commences commercial
operation;
- the assumption that the Company will make an equity investment
of approximately $180 million
following funding of the construction financing;
- the anticipation that permanent financing will be a combination
of convertible debentures and common equity;
- the assumption that the Project will provide $16 to $19 million worth of cash distributions
for each full year of operation through 2020; and
- the assumption that the Project will improve leverage and
credit metrics for the Company.
Forward-looking statements involve significant risks and
uncertainties, should not be read as guarantees of future
performance or results, and will not necessarily be accurate
indications of whether or not, or the times at or by which, events
will occur. In addition to the assumptions described above,
reference should also be made to the factors discussed under "Risk
Factors" in the Company's proxy dated October 3, 2011. Although the
forward-looking statements contained in this news release are based
upon what are believed to be reasonable assumptions, investors
cannot be assured that actual results will be consistent with these
forward-looking statements, and the differences may be
material. These forward-looking statements are made as of the
date of this news release and, except as expressly required by
applicable law, the Company assumes no obligation to update or
revise them to reflect new events or circumstances.
SOURCE Atlantic Power Corporation