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 TerminalThe 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 CenterIndeck 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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