- Issuance of equivalent CAN$912.6 million non-recourse green
bonds and equivalent CAN$119.7 million letter of credit facility
for its Chilean portfolio of assets
- Optimizes capital structure and returns for Innergex's Chilean
operations by adding debt to previously unencumbered assets
- Unlocks equivalent CAN$40.7 million of cash trapped in reserve
accounts and benefits from a pre-hedging strategy providing an
additional equivalent CAN$71.9 million of cash to Innergex
- Enhances initial cash on cash yield by incorporating a 3-year
interest-only period and extending debt maturity
- Provides capital for the construction of Innergex's first
battery energy storage project in Chile, where construction activities have
recently commenced
- Represents Latin America's
largest private placement deal in recent history
- Portfolio received an investment grade rating
LONGUEUIL, QC, Aug. 5, 2022
/CNW Telbec/ - Innergex Renewable Energy Inc. (TSX: INE)
("Innergex" or the "Corporation") announces the successful
completion of a US$803.1 million
(CAN$1.032 billion) refinancing of the non-recourse debt of its
portfolio of wholly owned assets in Chile with the issuance of US$710.0 million (CAN$912.6 million) green bonds
maturing in 2036 (with a balloon payment of US$139.0 million ((CAN$178.7 million)) and a
US$93.1 million (CAN$119.7 million)
letter of credit facility. A core group of global institutional
investors participated in the transaction, which saw strong demand
and was significantly oversubscribed.
"The positive reception from investors is a reflection of
Innergex's financial strength and growth prospects in Chile," said Michel
Letellier, President and Chief Executive Officer of
Innergex. "Our team was able to secure more favourable terms on our
refinancing allowing for additional financial flexibility and
extending the average maturity. This refinancing allows us to
unlock our portfolio value, optimize our capital structure and
align with our growing business as we continue to focus on
delivering long-term returns to shareholders."
The portfolio being refinanced is composed of a combination of
solar, wind and hydro assets as well as battery energy storage
systems ("BESS'') assets wholly owned by Innergex. Included in the
portfolio are the San Andrés solar farm (50.6 MW) and the
three Aela wind farms (332 MW), both acquired earlier this year, as
well as the Licán hydro facility (18 MW), Mampil hydro facility (55
MW), Peuchén hydro facility (85 MW), and Salvador solar facility (68 MW) together with
a 50 MW/250 MWh BESS project currently under construction. Innergex
also owns a 55% interest in Pampa
Elvira solar thermal facility (34 MW) and a 69.5% interest
in Guayacán hydro facility (12 MW), which were not
incorporated in the portfolio being financed. In May 2022, Innergex announced that two new
utility-scale battery energy storage projects, totalling 85 MW/425
MWh (5 hours per project), are currently under development in
Chile.
Overall, the Chilean portfolio of assets received an investment
grade rating, and the green bonds were priced at competitive levels
in the United States Treasury
("UST"). The refinancing process will allow Innergex to unlock
US$31.7 million (CAN$40.7 million) of
cash at closing and benefit from a pre-hedging strategy providing
an additional US$55.8 million
(CAN$71.9 million) in cash proceeds.
The net proceeds will be used to finance US$176.2 million (CAN$226.5 million) of the
acquisition of Aela wind farms, while US$72.6 million (CAN$93.3 million) will be used
to finance all development activities for the Salvador energy storage project. The remaining
balance will be used to repay US$548.7
million (CAN$705.3 million) of the existing debt and
other transaction costs.
The issuance of green bonds is related to the forward start
interest rate swaps entered into on February 17, 2022 with an
aggregate notional amount of US$331.2
million (CAN$425.8 million) in order to manage its exposure
to the risk of increasing interest rates on a portion of the
expected refinancing of the acquisition of Aela wind farms and the
existing Chilean projects. On July 25,
2022, the interest rate swaps previously entered into were
settled in favour of Innergex, for US$41.2
million (CAN$53.1 million). Moreover, the unwind of interest
rate swaps related to the current financings will provide an
additional US$14.6 million (CAN$18.8
million) of cash.
SMBC and CIBC World Markets Corp acted as placement agent
(books) and co-agent respectively for this transaction. SMBC also
acted as Financial Advisor to Innergex in respect of the
structuring of the transaction, as Sole Green Bond Coordinator, and
as sole issuing bank of the letter of credit facility.
The green bonds described above were offered in a private
placement under Section 4(a)(2) of the Securities Act of 1933, as
amended (the "Act"). Accordingly, the securities may not be offered
or sold in a public offering, since the Act exempts from
registration only transactions by an issuer not involving any
public offering.
About Innergex Renewable Energy
Inc.
For over 30 years, Innergex has believed in a world where
abundant renewable energy promotes healthier communities and
creates shared prosperity. As an independent renewable power
producer which develops, acquires, owns and operates hydroelectric
facilities, wind farms, solar farms and energy storage facilities,
Innergex is convinced that generating power from renewable sources
will lead the way to a better world. Innergex conducts operations
in Canada, the United States, France and Chile and manages a large portfolio of
high-quality assets currently consisting of interests in 84
operating facilities with an aggregate net installed capacity of
3,484 MW (gross 4,184 MW) and an energy storage capacity of 159
MWh, including 40 hydroelectric facilities, 35 wind farms, 8 solar
farms and 1 battery energy storage facility. Innergex also
holds interests in 13 projects under development with a net
installed capacity of 731 MW (gross 768 MW) and an energy storage
capacity of 745 MWh, 3 of which are under construction, as well as
prospective projects at different stages of development with an
aggregate gross installed capacity totaling 7,495 MW. Its approach
to building shareholder value is to generate sustainable cash
flows, provide an attractive risk adjusted return on invested
capital and to distribute a stable dividend.
Cautionary Statement Regarding Forward-Looking
Information
To inform readers of the Corporation's future
prospects, this press release contains forward-looking information
within the meaning of applicable securities laws ("Forward-Looking
Information"), including the use of proceeds of the green bonds and
the letter of credit facility, the Corporation's successful
development, construction and financing (including tax equity
funding) of the projects under construction and the advanced-stage
prospective projects, sources and impact of funding, plans and
strategic priorities, and other statements that are not historical
facts. Forward-Looking Information can generally be identified by
the use of words such as "approximately", "may", "will", "could",
"believes", "expects", "intends", "should", "would", "plans",
"potential", "project", "anticipates", "estimates", "scheduled" or
"forecasts", or other comparable terms that state that certain
events will or will not occur. It represents the projections and
expectations of the Corporation relating to future events or
results as of the date of this press release.
Forward-Looking Information includes future-oriented financial
information or financial outlook within the meaning of securities
laws, including information regarding the Corporation's targeted
Adjusted EBITDA and targeted Adjusted EBITDA Proportionate,
targeted Free Cash Flow, targeted Free Cash Flow per Share and
other statements that are not historical facts. Such information is
intended to inform readers of the potential financial impact of
expected results, of the expected commissioning of Development
Projects, of the potential financial impact of completed and future
acquisitions and of the Corporation's ability to sustain current
dividends and to fund its growth. Such information may not be
appropriate for other purposes.
Forward-Looking Information is based on certain key assumptions
made by the Corporation, including, without restriction, those
concerning hydrology, wind regimes and solar irradiation;
performance of operating facilities, acquisitions and commissioned
projects; project performance; availability of capital resources
and timely performance by third parties of contractual obligations;
favourable market conditions for share issuance to support growth
financing; favourable economic and financial market conditions; the
Corporation's success in developing and constructing new
facilities; successful renewal of PPAs; sufficient human resources
to deliver service and execute the capital plan; no significant
event occurring outside the ordinary course of business such as a
natural disaster, pandemic or other calamity; continued maintenance
of information technology infrastructure and no material breach of
cybersecurity. Please refer to Section 1 - Highlight of the
Management's Discussion and Analysis for the three- and six-month
period ended June 30, 2022 for
details regarding the assumptions used with respect to the 2022
growth targets and to Section 5 - Outlook of the Annual Report
for the 2020-2025 Strategic Plan outlook.
For more information on the risks and uncertainties that may
cause actual results or performance to be materially different from
those expressed, implied or presented by the forward-looking
information or on the principal assumptions used to derive this
information, please refer to the "Forward-Looking Information"
section of the Management's Discussion and Analysis for the
three-and six-month periods ended June 30,
2022.
Innergex Renewable Energy Inc.
www.innergex.com
SOURCE Innergex Renewable Energy Inc.