SunEdison, Inc. and West Street Infrastructure Partners III (WSIP) have announced the formation of a new $1 billion warehouse investment vehicle, the WSIP Warehouse, to fund construction costs and to acquire operating assets.
TerraForm Power, Inc., a global owner and operator of clean energy power plants, will have an exclusive call right over the warehoused assets.
The WSIP Warehouse is a $1 billion investment vehicle with $300 million equity committed, subject to certain conditions, by WSIP, the infrastructure fund managed by Goldman Sachs. The debt structuring will be led by Morgan Stanley, Bank of America and Deutsche Bank and will provide commitments for $700 million of debt in the form of a $500 million, five-year term loan and a $200 million, four-year revolving credit facility. SunEdison has the option to expand the facility by up to $1 billion to a total of $2 billion, subject to certain conditions.
Brian Wuebbels, SunEdison chief financial officer, said:
"SunEdison's new $1 billion warehouse provides incremental capacity for SunEdison to construct and hold assets in advance of drop down to TerraForm Power. The WSIP Warehouse expands our capacity beyond our existing $1.5 billion First Reserve Warehouse and the $500 million dollar TerraForm Private Warehouse. Our new warehouse supports SunEdison's 2016 guidance for growth, reinforces the depth of demand for investor participation in SunEdison's warehouse platform and provides repeatable and scalable funding for the future."
Edward Pallesen, head of the Infrastructure Investment Group for the Americas within the Merchant Banking Division at Goldman Sachs, said:
"We are excited to partner with SunEdison as we seek to expand our portfolio of investments in solar and wind projects. SunEdison and TerraForm Power have a proven track record of delivering high quality renewable energy projects, and we are pleased to be able to support their future growth initiatives."
The decision to add additional warehouse capacity was completed following an analysis by SunEdison of its financing requirements through 2016 and after exploring alternative debt and equity transactions. SunEdison continues to explore financing alternatives, including upsizing its existing warehouse facilities and adding new warehouse facilities. Completion of the formation of the WSIP Warehouse and the financial close of the related debt facilities are subject to customary conditions and are expected to occur by Oct. 31, 2015.