TerraForm, BP and Diamond Get Better Terms on Wind Farm Debt

TerraForm Power Inc., BP Plc and Diamond Generating Corp. repriced about $187 million of outstanding debt with a lower rate for a wind farm in Idaho, according to a person familiar with the deal.

The debt is now priced between 162.5 and 175 basis points over Libor, according to the person, who asked not be identified because they’re not authorized to discuss the deal. About seven years remain on the loan, which had been priced between 300 and 325 basis points over the London interbank offered rate.

The repricing for the 124.5 MW Goshen II wind farm is one of several similar deals this year as clean-energy companies take advantage of liquid credit markets to obtain better terms for their projects. Lenders have been willing to accommodate longstanding clients that are active borrowers in the debt markets. The deal will also provide a boost to TerraForm, a unit of SunEdison Inc. that buys and operates power plants and has faced investor scrutiny in recent months.

The deal closed last week, according to the person. Executives for TerraForm, BP and Diamond Generating declined to comment.

TerraForm bought a 12.5 percent stake in Goshen II from Atlantic Power Corp. this year. The plant sells its output to Southern California Edison.

The wind farm was developed with a $300 million debt package that closed in June 2010, two years after the 2008 financial collapse when liquidity in the debt markets was constrained and margins were wider.

Lenders Mitsubishi UFJ Financial Group Inc., Mizuho Financial Group Inc., Sumitomo Mitsui Banking Corp., CoBank ACB and Deutsche Bank AG participated in the repricing, according to the person.

©2015 Bloomberg News

Lead image: Wind farm in Idaho. Credit: Shutterstock.

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