Atlantic Power Corporation announces closing of $900 million senior secured credit facilities

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Atlantic Power Corporation announces closing of $900 million senior secured credit facilities

Atlantic Power Corporation, a company that owns and operates a diverse fleet of power generation assets in the United States and Canada, announced that APLP Holdings Limited Partnership, a wholly-owned subsidiary of the company, has entered into new senior secured credit facilities, comprising $700 million in aggregate principal amount of senior secured term loan facilities and $200 million in aggregate principal amount of senior secured revolving credit facilities

The maturity dates of the new revolver and the new term loan are April 2021 and April 2023, respectively.

Proceeds from the new term loan reflect an original issue discount of 3%. The interest rate on the new term loan is the Adjusted Eurodollar Rate plus a margin of 5.00%.

The new term loan contains customary prepayment provisions, including a mandatory 1% annual amortization and mandatory prepayment via the greater of a 50% cash sweep or such other amount that is required to achieve a specified targeted debt balance.

The press release said that the firm and its subsidiaries expect to use the proceeds of the new term loan to:

  • fund the prepayment of the existing senior secured term loan at the company's Atlantic Power Limited Partnership subsidiary in the amount of $447.9 million, plus accrued interest;
  • fund the optional prepayment or redemption of the company's outstanding unsecured subordinated debentures;
  • pay transaction costs and expenses; and
  • make a distribution to the company from remaining proceeds of approximately $106 million, which the company may use for any corporate purpose

James J. Moore, Jr., President and Chief Executive Officer of the company, said: 

"We are pleased to have closed this financing transaction despite a difficult market environment, particularly for companies in the energy sector. Following the planned redemption of our 2017 convertible debentures, we will have no corporate debt maturities prior to 2019.  Continued delevering of our balance sheet is an important priority for us and will be achieved through amortization and discretionary debt repurchases. Although our cash flow allocation will be focused on additional debt reduction, we now have adequate financial flexibility to invest in some capital-light growth opportunities and to continue making discretionary investments in our power plants." 

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