Short list: Project Bond of the Year 2020
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Short list: Project Bond of the Year 2020


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

The US private placement market has become more versatile in recent years, leading to a wave of innovative project bonds. We have selected three deals in this competitive category. Please let us know if your firm is missing from the credits.

Project Arcadia

TerraForm Power raised about $296 million to refinance a portion of the debt it raised in 2019 to acquire the unlevered 320 MW Arcadia portfolio of distributed solar and fuel cell assets from AltaGas. The former yield company, which is now wholly owned by Brookfield Renewable Partners, priced the project bond in September at 275 bp over Treasurys, producing a 3.38% coupon. The deal was about 2.5 times oversubscribed and also pushed both rating agencies and the market on merchant exposure.

The deal closed on September 22, 2020. Coverage here and here.

Sponsor: TerraForm Power, a subsidiary of Brookfield Renewable Partners

Deal value: $296.4 million

Joint placement agents: Natixis and RBC Capital Markets

Tenor: 23 years and four months with a weighted average life of 9.6 years

Pricing: 275 bp over Treasurys

Placement agents: RBC Capital Markets and Natixis

Issuer’s counsel: Skadden Arps

Investors’ counsel: Milbank

Independent engineer: AWS Truepower, which is a UL company

Insurance consultant: STANCE Renewable Risk Partners

Clearway Energy Utah

This deal scored points for innovation as it was the first project bond deal to be coupled with kWh Analytics’ solar revenue put. The pairing helped Clearway Energy achieve the 1.2 times debt service coverage ratio required for an investment grade credit rating and also to increase the debt raised to refinance its 530 MW Utah Solar Holdings portfolio. The 4(a)(2) transaction achieved one of the lowest coupons in the capital markets post-COVID for a project rated BBB–, coming in at 295 bp over Treasury’s, and was over two times oversubscribed. Clearway and Dominion Energy both own the seven-project portfolio on a 50:50 basis.

The deal closed on September 1, 2020. Coverage here.

Sponsor: Clearway Energy

Deal value: $315 million

Private placement: $300 million

Pricing: 295 bp over Treasurys

Letter of credit facility: $15 million

Sole placement agent: Citi (also sole LC issuer, sole swap unwind coordinator and collateral and depository agent)

Solar revenue put: kWh Analytics

Counsel to institutional investors and LC issuing bank: Milbank

Sidney A. Murray

In April 2020, Brookfield Renewables issued a senior secured private placement to refinance the 192 MW Sidney A. Murray Jr. run-of-river hydro facility in Louisiana, which it owns on a 75:25 basis with ArcLight Capital Partners. The $560 million deal was transacted against the volatile capital markets environment induced by the COVID-19 pandemic, which had just hit the US. Still, the sponsor managed to secure funds from institutional investors such as Metlife Investment Management, which contributed $130 million – including $74 million on behalf of six unaffiliated clients. The 10-year bond has an all-in coupon of 4%.

The deal closed in November 2020. Coverage here.

Sponsor: Brookfield Renewables

Deal value: $560 million

Placement agents: Barclays and RBC Capital Markets

Institutional investors include: Metlife Investment Management, the institutional asset management arm of MetLife

Institutional investors’ counsel: Milbank

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