Power Finance & Risk is pleased to announce the short list for the following award: Conventional Power Deal of 2019.

Getting a new-build gas-fired project across the finish finish line is no mean feat, so we have selected four primary financings in this category. Please let us know if your firm is missing from the credits.

Guernsey Power Station

The largest financing of a greenfield gas-fired project in PJM Interconnection in 2019, with a total value of $1.6 billion across its multi-layered capital stack, plus a $125 million revolving credit facility. The 1,875 MW project – which will be the largest gas-fired plant in Ohio – is supported by a unique commodity hedge combination of revenue put and gas netback. The deal closed on August 29. Coverage here.

Sponsors: Caithness Energy, Apex Power Group

Senior Term Debt: $950 million

Tenor: Construction plus five years

Revolving credit facility: $125 million

Preferred equity investor: BlackRock

Mezzanine lender: AMP Capital

Financial adviser: Morgan Stanley

Underwriter and sole bookrunner: Investec

Coordinating lead arrangers: Crédit Agricole, NH Investment & Securities, KEB Hana Bank, Nomura, ICBC

Joint lead arrangers: China Merchants Bank, KB Kookmin Bank

Borrower’s counsel: Morgan Lewis

Lenders’ counsel: Kirkland & Ellis

Counsel to AMP Capital: Latham & Watkins

Counsel to BlackRock: Simpson Thacher 

Hill Top Energy Center

Ares Management Corp eschewed the bank market for the financing of its 620 MW Hill Top project in Pennsylvania, opting instead for a project bond. The structure was made possible by the project’s 8.5-year gas netback hedge, which allowed Kroll Bond Rating Agency to award the senior bonds a BBB- credit rating. Ares also obtained mezzanine debt from Investec to fund the issuance of a letter of credit to backstop the sponsor’s equity obligations. The deal closed on March 27. Coverage here.

Sponsors: Ares Management Corp, Abatis

Total enterprise value: $726 million

Senior term debt: $375 million

Tenor: 10 years

Ancillary facilities: $45 million

Mezzanine debt: $156 million

Placement agent: Morgan Stanley

Financial adviser: PJ Solomon

Borrower’s counsel: Morgan Lewis

Placement agent/investors’ counsel: White & Case

Sponsor’s local counsel: Ballard Spahr

Investors’ local counsel: Buchanan, Ingersoll & Rooney

Credit rating agency: Kroll Bond Rating Agency

EPC: Kiewit 

Long Ridge Energy Terminal

The first financing of 2019 for a new gas-fired project in PJM Interconnection was a very unusual one. The transaction financed the 485 MW Long Ridge Energy Generation project – also as Hannibal Port Power – as well as an interest in a gas production field under development in Ohio. Because of this and the project’s unusual commodity hedge structure, developer Fortress Transportation and Infrastructure had to put together a unique non-bank debt deal, which closed on February 15. Coverage here and here.

Sponsors: Fortress Transportation and Infrastructure, GCM Grosvenor

Total debt: $742 million

First lien loan: $445 million

Second lien loan: $143 million

Letter of credit: $154 million

Lead arranger: AMP Capital

Co-arrangers: ING Capital, Mirae Asset Daewoo, Elsdon Investment

LC issuer: ING Capital

Borrower’s counsel: Cravath, Swaine & Moore

Arranger’s counsel: Latham & Watkins

Project counsel: Morgan Lewis

Local counsel: Porter Wright Morris & Arthur

Commodity hedge adviser: Powder Day Capital

Independent engineer: Black & Veatch

Insurance consultant: Aon Risk Services

Admin agent: Cortland Capital Market Services

EPC: Kiewit

Sell-side financial adviser: Citi

Buy-side financial adviser: TD Securities

GCM Grosvenor’s counsel: Baker Botts

Niles Energy Center

Indeck Energy Services raised more than $1 billion to finance the 1,085 MW Niles Energy Center in Michigan, with South Korean investors participating notably in both the equity and debt. The latter was split between fixed and floating rate loans and letters of credit. The project has a five year revenue put with Citi. The deal closed on April 25. Coverage here.

Sponsors: Indeck Energy Services, Korean Southern Power Corp, Daelim

Total debt: $635 million

Senior floating-rate debt: $437 million

Senior fixed-rate debt: $150 million

Tenor: Construction plus five years

Ancillary facilities: $47 million

Coordinating lead arranger (left lead): BNP Paribas

Coordinating lead arrangers (floating-rate): Crédit Agricole, Nomura, NH Bank

Coordinating lead arranger (fixed-rate): Hana Financial

Financial adviser: Whitehall & Co

Borrower’s counsel: Morgan Lewis

Lenders’ counsel: Norton Rose Fulbright

Counsel to Korean Southern Power Corp and Daelim: Latham & Watkins

Independent engineer and market consultant: Leidos

Insurance consultant: Moore McNeil

EPC: Kiewit Power

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