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Awards

Short list: Transmission Deal of the Year 2020

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Power Finance & Risk is pleased to announce the short list for the following award: Transmission Deal of 2020.

Transmission projects are among the most difficult to develop. We have selected three deals from 2020 in this category. Please let us know if your firm is missing from the credits.








WETT Holdings

Axium Infrastructure and Nuveen arranged a complex financing package to support their acquisition of Wind Energy Transmission Texas, an electric transmission provider in West Texas, from Canada’s PSP Investments and Brookfield Infrastructure Partners. In a process codenamed Project Hotspur, the buyers secured a $75 million holdco facility from MUFG and Zions Bancorp and about $272 million of senior secured notes due in 2030, issued by WETT Holdings, in a private placement. The company owns and operates 375 miles of 345 kV transmission lines and six substations.

The deal closed on July 27, 2020. Coverage here.

Buyers: Axium Infrastructure and Nuveen, which is the investment manager of TIAA

Sellers: PSP Investments and Brookfield Infrastructure Partners

Deal value: $1.35 billion

Holdco facility: $75 million

Lenders: MUFG and Zions Bancorp

Private placement: $272 million

Buyers’ financial adviser: Barclays

Sellers’ financial adviser: BMO Capital Markets

Buyers’ counsel: Winston & Strawn

Sellers’ counsel: King & Spalding

Counsel to TIAA: Morgan Lewis

Lenders’ counsel: Shearman & Sterling

LS Power Grid

The more than $700 million debt financing and corporate restructuring that LS Power undertook to create its LS Grid transmission platform is impressive not only because of its significant scale, but also due to the complexity of reaching financial close for multiple, discrete transactions simultaneously. This included construction financing, refinancings for operating assets, opco and holdco debt, private placements and commercial bank debt, all executed in tandem with an internal corporate restructuring in an effort to create a platform for LS power to hold existing transmission assets and develop additional assets in the future.

The deal closed in December 2020.

Sponsor: LS Power

Deal value: $700 million

Private placements:

  • $102 million (for the DesertLink transmission line, which also secured a $15 million revolving credit facility)

  • $71.6 million (for the Silver Run Electric transmission line, with an accompanying $10 million revolver)

  • $29.3 million (for the Republic transmission line, with an accompanying $5 million revolver)

Term loan:

  • $220 million term and revolving credit facility (for the construction of the “Segment A” transmission project in New York)

  • $255 term and revolving credit facility for LS Grid to develop new transmission assets across the US

Sponsor’s counsel: Milbank




Western Spirit

Pattern Energy Group’s over $1.7 billion financing of its Western Spirit transmission line and wind project portfolio in central New Mexico was one of the largest renewable project financings in the US in 2020 and supported the construction of the largest single-phase renewables project in the country. The 150-mile, 345 kv AC transmission line has a capacity of 800 MW and will carry the output of the four adjacent wind farms in the portfolio, which total 1,050 MW, across New Mexico and Arizona to deliver it to California. The debt package was split between a construction loan, which will partly bridge to a tax equity investment underwritten by GE Energy Financial Services, as well as a letter of credit and back-leverage term loan.

The deal closed on December 31, 2020. Coverage here and here.

Sponsor: Pattern Energy Group

Deal size: $1.76 billion

Tax equity commitments: $900 million

Coordinating lead arranger: HSBC

Lead arrangers and joint bookrunners: CoBank (sole term loan bookrunner), Société Générale (letter of credit provider), Banco Santander, MUFG and CIBC

Sponsor’s counsel: Milbank and Skadden Arps

Lenders’ counsel: Winston & Strawn

Independent engineer and wind consultant: DNV GL

Transmission consultant: Navigant

Insurance consultant: Moore McNeil

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