PFR's Deal of the Year Awards are back, recognizing excellence in power project finance and M&A. Check out the shortlisted deals in the North America Conventional Power Project Finance category.

Congratulations to everyone who worked on the shortlisted deals:

  • The Carlyle Group’s Rhode Island State Energy Center refinancing
  • Advanced Power’s South Field Energy greenfield financing
  • Competitive Power Ventures’ term loan B refinancing of Woodbridge Energy Center (also known as CPV Shore)
  • Ares-EIF’s St. Joseph Energy Center term loan B refinancing

Deal profiles:

Rhode Island State Energy Center

Sponsor(s)

The Carlyle Group

Assets

A 594 MW combined-cycle gas-fired project in Johnston, R.I.

Deal Type

Term loan A, revolving credit facility

Deal Value

$363 million

Closing Date

July 20

Bookrunner

Investec

Legal Advisers

Skadden (lenders)

Latham & Watkins (borrower)

Other Involved Parties

China Merchants Bank, Credit Agricole, MUFG, Capital One, East West Bank, ICBC, KEB Hana (lenders)

Leidos Engineering (independent engineer)

Moore-McNeil (insurance consultant)

Navigant (market consultant)

Notes:

The seven-year term loan A signaled the competitiveness of bank loans as the sponsor elected to roll the debt out of the term loan B market, where the project had been financed in 2015. The new package comprised a $318 million term loan and a $45 million revolver, priced at 275 bp over Libor. The notes were more than twice oversubscribed in part due to the three-year tolling agreement with Shell and in part due to an innovative hedge toggle feature, which automatically adjusts the loan price depending on whether the project is supported by a power hedge in the future.

South Field Energy

Sponsor(s)

Advanced Power

Assets

South Field Energy, a 1,182 MW CCGT near Wellsville, Ohio

Deal Type

Term loan A, ancillary facilities

Deal Value

$1.3 billion

Closing Date

August 23

Bookrunners

Credit Agricole, CIT Bank, Starwood Infrastructure Finance (formerly GE Energy Financial Services), NH Investment & Securities

Legal Advisers

Bracewell (borrower)

Norton Rose Fulbright, Milbank (lenders)

Orrick (lenders and equity)

Shearman & Sterling, Latham & Watkins (equity)

Other Involved Parties

Whitehall & Co. (financial advisor)

ABN Amro, Bank of America, ICBC, National Australia Bank, Atudot Pension Fund, Clal Insurance, Woori Bank (lenders)

Kyushu Electric Power, NH-Amundi Asset Management, PIA Investment Management, Development Bank of Japan, Showa Shell Sekiyu K.K., Shikoku Electric Power, Bechtel (equity investors)

Notes:

South Field holds the distinction of being the only new-build CCGT financed in PJM Interconnection in 2018. The $750 million dual-tranche senior secured facility included $200 million of fixed-rate notes underwritten by NH Investment & Securities and priced at 6.2%. The deal was notable for attracting far-flung investors from Europe and Asia to the U.S. power sector, many for the first time. The sheer size of the project was another factor in its nomination—it is almost twice as large as many other greenfield CCGTs in PJM. Besides the term debt—priced at 325 bp over Libor—the lead arrangers also provided a $119 million letter of credit and GE Capital funded a $10 million revolver.


Woodbridge Energy Center (CPV Shore)

Sponsor(s)

Competitive Power Ventures, Toyota Tsusho Corp., Osaka Gas USA Corp., John Hancock Life Insurance Co.

Assets

A 725 MW CCGT located in Woodbridge, N.J.

Deal Type

Term loan B, revolving credit facility

Deal Value

$545 million

Closing Date

Dec. 27

Bookrunners

Morgan Stanley (left), Credit Agricole, MUFG

Legal Advisers

Latham & Watkins (borrower)
White & Case (lenders)

Other Involved Parties

Leidos (market consultant and independent engineer)

Notes:

CPV navigated a tough term loan B market at the end of the year to secure a good print for its Woodbridge project, which has been operating since January 2016. At a time when other term loan B refinancings had been shelved, the sponsors were able to cut pricing on the existing debt by 50 basis points to close at 375 bp over Libor and used the proceeds of the term loan B to pay themselves a $100 million dividend. The packaged comprised a $425 million seven-year term loan and a $120 million five-year revolver, issued at a 99% discount. CPV Shore has a five-year heat rate call option as well as PJM Interconnection capacity contracts through 2022. The notes are rated Ba2 and BB by Moody’s Investors Service and Fitch Ratings respectively.


St. Joseph Energy Center

Sponsor(s)

Ares-EIF, Toyota Tsusho America

Assets

A 709 MW gas-fired combined-cycle project near the town of New Carlisle, Ind.

Deal Type

Term loan B

Deal Value

$464 million

Closing Date

April 4; June 29 (incremental loan close)

Bookrunner

BNP Paribas

Legal Advisers

Orrick (borrower)

Shearman & Sterling (lender)

Other Involved Parties

Kiewit Power Constructors (EPC)
ICF (market consultant)
Siemens (turbine provider)
Wilmington Trust (collateral agent)

Notes:

The landmark St. Joseph term loan B refinancing has become a template used by sponsors and bankers across the quasi-merchant thermal power sector. Just a week after the project came online on April 1, BNP Paribas refinanced the existing $400 million bank loan into a $407.7 million seven-year term loan B and $41 million five-year revolver at 350 bp over Libor, the tight end of initial price talk. Two months later, the sponsors wrung an incremental $15 million from term loan B investors, using the proceeds to pay themselves an equity distribution. Located in the coal-heavy AEP region of PJM, “St. Joe”, as project financer bankers refer to the project, has PJM capacity contracts through 2022 and a five-year revenue put with BP. The project was assigned Ba3/BB ratings by Moody’s Investors Service and S&P Global Ratings for the refi but the cash sweep was recently amended from 75% to 50%, which caused S&P to lower its rating to BB-.

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