sPower, a renewable energy Independent Power Producer, recently closed a $498.7 million, investment grade, private placement financing. The financed portfolio represents approximately half of sPower’s 1.3 GW of operating portfolio.
This financing follows sPower’s $421.4 million debt issuance against approximately 565 MW of utility-scale wind and solar assets in 2017 (a transaction that received Project Finance International’s “Americas Renewables Deal of the Year” award). These transactions are among the first ever widely distributed back-leverage bond financings on tax equity partnerships.
The portfolio is comprised of four previously financed tax equity partnerships with four leading financial investors.
“Repeated success always feels great. Our first issuance was an achievement, but this second deal cements sPower’s ability to execute consistently and at the highest level in the institutional debt markets. We are grateful to have financing counterparties and partners that continue to ‘be there’ to support sPower’s growth,” said sPower CEO, Ryan Creamer.
The proceeds from this issuance refinanced approximately $425 million of medium-term bank loans, lengthening tenor to a fully-amortizing 23.5-year facility and eliminating the refinancing risk associated with previous bank loans. Incremental proceeds net of the bank loan refinancing will be used to fund sPower’s continued development of additional renewable generating facilities. The offering was significantly oversubscribed by a diverse group of leading US private placement investors.
“We feel great about taking this much interest rate risk off the table in today’s environment. As the space continues to get more competitive, the importance of de-risking cash flows to preserve our margins has never been more important. We are also very pleased with the level of execution around term and rates,” said sPower CFO, David Shipley.