DEDHAM, Mass., March 21, 2016 /PRNewswire/ -- Atlantic
Power Corporation (NYSE: AT) (TSX: ATP) ("Atlantic Power" or the
"Company") announced today the next step in its plan to reshape its
balance sheet and further reduce its near--term debt
maturities. The Company intends to refinance the existing
term loan and revolving credit facility at its Atlantic Power
Limited Partnership ("APLP") subsidiary. The new term loan,
to be raised by APLP Holdings Limited Partnership ("APLP
Holdings"), an intermediate holding company for APLP and a
wholly-owned subsidiary of the Company, is expected to be increased
in size to up to $700 million, with
excess proceeds expected to be utilized for the redemption of the
Company's convertible debentures maturing in 2017 as well as other
potential initiatives to reshape the Company's capital structure
(as described below). The new term loan is expected to have a
seven-year maturity (two years later than the maturity of APLP's
existing term loan) and the new revolver a five-year maturity
(three years later than the maturity of APLP's existing
revolver). Following completion of the refinancing, the
Company will have no corporate debt maturities prior to 2019.
Although initially this refinancing will not result in a net
reduction in debt, debt reduction is expected to occur over time
through mandatory amortization of the new term loan and a 50% cash
sweep.
Details of this announcement are as follows:
APLP Holdings today launched the syndication of proposed new
senior secured credit facilities, comprising up to $700 million in aggregate principal amount of
senior secured term loan facilities and up to $210 million in aggregate principal amount of
senior secured revolving credit facilities (collectively, the "New
Credit Facilities"). Subject to entry into definitive
documentation for the New Credit Facilities, satisfaction of the
conditions to closing thereunder and the other matters more fully
described below, the Company and its subsidiaries expect to use the
New Credit Facilities to:
- replace APLP's existing $210
million senior secured revolving credit facility maturing in
February 2018;
- fund the prepayment of the APLP senior secured term loan, which
had an outstanding principal amount of $473.2 million as of December 31, 2015 and which matures in
February 2021;
- fund the optional prepayment or redemption of the Company's
outstanding Cdn$67.3 million 6.25%
Convertible Unsecured Subordinated Debentures, Series A, maturing
in March 2017, and the Company's
outstanding Cdn$75.8 million 5.60%
Convertible Unsecured Subordinated Debentures, Series B, maturing
in June 2017 (total US$ equivalent
$103.4 million as of December 31, 2015);
- provide for ongoing working capital needs of the Company and of
APLP Holdings and its subsidiaries;
- support APLP Holdings' and its subsidiaries' collateral support
obligations to contract counterparties;
- provide for general corporate purposes of APLP Holdings and its
subsidiaries;
- fund a debt service reserve for the new revolving credit
facility;
- pay transaction costs and expenses; and
- (upon closing) make a distribution to the Company from
remaining proceeds of the term loan, which the Company may use for
any corporate purpose, including, at the discretion of the Company,
repurchase of convertible debentures maturing in 2019 and
repurchase of preferred and common equity.
Subject to and concurrent with the close of this transaction,
two other subsidiaries of the Company – Atlantic Power
Transmission, Inc. ("APT") and Atlantic Power Generation, Inc.
("APG") – will be contributed to APLP Holdings. Five of the
six power generating assets owned by APT and APG will be added to
the existing borrower's collateral package of 17 power generating
assets. The collateral package for the New Credit Facilities
will thus consist of a first lien on 16 of the 17 APLP projects, a
pledge of the Company's equity interest in the remaining APLP
project, and a pledge of the Company's equity interests in the five
contributed projects at APT and APG. In addition, the Company
will provide a downstream guarantee of the New Credit
Facilities.
APLP's existing Cdn$210 million
aggregate principal amount of 5.95% Senior Unsecured Medium Term
Notes maturing in June 2036 (the
"MTNs") prohibit APLP (subject to certain exceptions) from granting
liens over any of its assets (and those of its material
subsidiaries) to secure any indebtedness, unless the MTNs are
secured equally and ratably with such other indebtedness.
Accordingly, in connection with the execution of the New Credit
Facilities, APLP will grant an equal and ratable security interest
in the collateral package securing the New Credit Facilities in
favor of the trustee for the benefit of the holders of the
MTNs.
The closing of the New Credit Facilities is subject to
syndication, the conclusion of negotiations, execution of
definitive documentation, receipt of requisite approvals and
satisfaction of customary closing conditions. There can be no
assurance that APLP Holdings will be successful in its syndication
efforts or that APLP Holdings will be able to enter into the New
Credit Facilities.
The Company has appointed Goldman Sachs Lending Partners LLC and
Merrill Lynch, Pierce, Fenner & Smith Incorporated as joint
bookrunners for the New Credit Facilities.
For a summary of the anticipated terms of the New Credit
Facilities, please see the Company's Current Report on Form 8-K
dated March 21, 2016 filed with the
Securities and Exchange Commission.
About Atlantic Power
Atlantic Power owns and operates a diverse fleet of power
generation assets in the United
States and Canada. The Company's power generation
projects sell electricity to utilities and other large commercial
customers largely under long-term power purchase agreements, which
seek to minimize exposure to changes in commodity prices.
Atlantic Power's power generation projects in operation have an
aggregate gross electric generation capacity of approximately 2,138
MW, in which its aggregate ownership interest is approximately
1,500 MW. The Company's current portfolio consists of
interests in twenty-three operational power generation projects
across nine states in the United
States and two provinces in Canada.
Atlantic Power 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
Investor Relations
(617) 977-2700
info@atlanticpower.com
Copies of certain 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.
Cautionary Note Regarding Forward-Looking Statements
To the extent any statements made in this news release contain
information that is not historical, these statements are
forward-looking statements within the meaning of Section 27A of the
U.S. Securities Act of 1933, as amended, and Section 21E of the
U.S. Securities Exchange Act of 1934, as amended, and under
Canadian securities law (collectively, "forward-looking
statements").
Certain statements in this news release may constitute
"forward-looking statements", which reflect the expectations of
management regarding the future growth, results of operations,
performance and business prospects and opportunities of the Company
and its projects. These statements, which are based on
certain assumptions and describe the Company's future plans,
strategies and expectations, can generally be identified by the use
of the words "may," "will," "project," "continue," "believe,"
"intend," "anticipate," "expect" or similar expressions that are
predictions of or indicate future events or trends and which do not
relate solely to present or historical matters. Examples of
such statements in this press release include, but are not limited
to, statements with respect to the following:
- the successful syndication, negotiation (including the
definitive terms of relevant covenants) and execution of the New
Credit Facilities;
- the Company's general expectations regarding the use of
proceeds;
- the Company's expectations regarding corporate debt maturities
following entry into the New Credit Facilities; and
- the Company's expectations regarding the impact of the New
Credit Facilities on debt reduction efforts.
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 such
performance or results will be achieved. Please refer to the
factors discussed under "Risk Factors" and "Forward-Looking
Information" in the Company's periodic reports as filed with the
Securities and Exchange Commission from time to time for a detailed
discussion of the risks and uncertainties affecting the
Company. 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.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/atlantic-power-corporation-announces-launch-of-syndication-of-new-senior-secured-credit-facilities-by-aplp-holdings-limited-partnership-300238704.html
SOURCE Atlantic Power Corporation