DEDHAM, Mass., Oct. 31, 2018 /PRNewswire/ -- Atlantic Power Corporation (AT) (ATP.TO) ("Atlantic Power" or the "Company") announced effective today a re-pricing of the $470 million senior secured term loan ("term loan") and $200 million senior secured revolving credit facility ("revolver") at its APLP Holdings Limited Partnership ("APLP Holdings") subsidiary, via a group of arranging banks led by Goldman Sachs Lending Partners LLC. The interest rate margin on the term loan and revolver was reduced by 25 basis points to LIBOR plus 275 basis points. The LIBOR floor remains at 1.00%. This re-pricing is the fourth for these facilities. Since the original financing in April 2016, the spread has been reduced a total of 225 basis points, from LIBOR plus 500 basis points to LIBOR plus 275.
The Company is permitted to prepay the term loan in the first six months following this transaction at a 1% premium. Following the six-month period, prepayment is permitted at par. The mandatory 1% annual amortization and cash sweep provisions of the term loan are unchanged.
As a result of this latest re-pricing, the Company expects to realize interest cost savings in 2019 of approximately $1.2 million. Cumulative savings through the maturity dates of the term loan (April 2023) and revolver (April 2022) are estimated to be approximately $3.25 million. The combined savings of the four re-pricing transactions (before transaction-related costs) is expected to be approximately $44.4 million over the terms of the facilities.
The Company expects to record fees related to this transaction in the fourth quarter of 2018.
"We were pleased to take advantage of strong market conditions and achieve a tighter spread on our term loan and revolver. This will further reduce our interest expense and benefit our cash flow," said Terrence Ronan, Executive Vice President and Chief Financial Officer of Atlantic Power.
About Atlantic Power
Atlantic Power is an independent power producer that owns power generation assets in nine states in the United States and two provinces in Canada. The Company's generation projects sell electricity and steam to investment-grade utilities and other creditworthy large customers predominantly under long‑term PPAs that have expiration dates ranging from 2019 to 2037. The Company seeks to minimize its exposure to commodity prices through provisions in the contracts, fuel supply agreements and hedging arrangements. The projects are diversified by geography, fuel type, technology, dispatch profile and offtaker (customer). The majority of the projects in operation are 100% owned and directly operated and maintained by the Company. The Company has expertise in operating most fuel types, including gas, hydro, and biomass, and it owns a 40% interest in one coal project.
Atlantic Power's shares trade on the New York Stock Exchange under the symbol AT and on the Toronto Stock Exchange under the symbol ATP. For more information, please visit the Company's website at www.atlanticpower.com or contact:
Atlantic Power Corporation
Copies of the Company's financial data and other publicly filed documents are available on SEDAR at www.sedar.com or on EDGAR at www.sec.gov/edgar.shtml under "Atlantic Power Corporation" or on the Company's website.
Cautionary Note Regarding Forward-Looking Statements
To the extent any statements made in this news release contain information that is not historical, these statements are forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, and under Canadian securities law (collectively, "forward-looking statements").
Certain statements in this news release may constitute "forward-looking statements", which reflect the expectations of management regarding the future growth, results of operations, performance and business prospects and opportunities of the Company and its projects. These statements, which are based on certain assumptions and describe the Company's future plans, strategies and expectations, can generally be identified by the use of the words "may," "will," "project," "continue," "believe," "intend," "anticipate," "expect" or similar expressions that are predictions of or indicate future events or trends and which do not relate solely to present or historical matters. Examples of such statements in this press release include, but are not limited, to statements with respect to the following:
- the Company's estimates of interest cost savings resulting from the reduction in the spread on its term loan and revolver; and
- the Company's expectation that these interest cost savings will benefit its cash flow.
Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not or the times at or by which such performance or results will be achieved. Please refer to the factors discussed under "Risk Factors" and "Forward-Looking Information" in the Company's periodic reports as filed with the U.S. Securities and Exchange Commission (the "SEC") from time to time for a detailed discussion of the risks and uncertainties affecting the Company. Although the forward-looking statements contained in this news release are based upon what are believed to be reasonable assumptions, investors cannot be assured that actual results will be consistent with these forward-looking statements, and the differences may be material. These forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, the Company assumes no obligation to update or revise them to reflect new events or circumstances.