CALGARY, AB, Oct. 8, 2020 /CNW/ - TransAlta Renewables Inc. ("TransAlta Renewables" or the "Company") (TSX: RNW) today announced that TEC Hedland Pty Ltd. (the "Issuer"), has priced an approximately AUD$800 million senior secured note offering, by way of a private placement, which will be secured by, among other things, a first ranking charge over all assets of the Issuer (the "Financing"). TransAlta Renewables owns an indirect economic interest in the Issuer, which provides the Company with the economic benefit of the Financing.
The senior secured notes ("the Notes") are amortizing and will bear interest from their date of issue at a rate of 4.07% per annum, payable quarterly and mature on June 30, 2042. The Notes have a preliminary rating of BBB, with a Stable trend, by Kroll Bond Rating Agency.
Closing of the Financing is expected to occur on or around October 22, 2020.
The Issuer's assets consist of the 150 MW combined cycle gas power station located in Western Australia. The South Hedland power station achieved commercial operation in July 2017 and supplies power to Horizon Power, the state energy utility in the region.
The Issuer will use the net proceeds of the Financing to fund various debt service, maintenance and other collateral security reserves, to repay outstanding indebtedness of the Issuer to other Company affiliates, to pay expenses associated with the Financing, to fund one or more intercompany loans to its affiliates and for other corporate purposes. The Company will receive a portion of the proceeds from the repayment of the Issuer's intercompany loans and will use those proceeds to repay drawn amounts under the Company's credit facility, for general corporate purposes and to fund planned growth initiatives.
The Notes have been offered only in a private placement to institutional accredited investors in reliance on Section 4(a)(2) under the Securities Act and to certain non-U.S. Persons in transactions outside the United States in reliance of Regulation S under the Securities Act. The Notes have not been registered under the Securities Act, or any state securities laws, and the Issuer has no obligation to register any future re-offer or re-sale of the Notes under the Securities Act or the securities laws of any other jurisdiction. The Notes may not be offered or sold in the United States except pursuant to an effective registration statement or an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.
The Notes have not been and will not be qualified for distribution to the public under applicable Canadian securities laws and, accordingly, any offer and sale of the securities in Canada will be made on a basis which is exempt from the prospectus and dealer registration requirements of such securities laws. The Notes have been offered in Canada on a private placement basis only to "accredited investors".
This press release does not constitute an offer to sell or the solicitation of an offer to buy the Notes. This press release also does not constitute an offer to sell or the solicitation of an offer to buy the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction, or an exemption is available from such registration or qualification.
About TransAlta Renewables Inc.
TransAlta Renewables is among the largest of any publicly traded renewable independent power producers ("IPP") in Canada. Our asset platform and economic interests are diversified in terms of geography, generation and counterparties and consist of interests in 23 wind facilities, 13 hydroelectric facilities, seven natural gas generation facilities, one solar facility, one natural gas pipeline, and one battery storage project, representing an ownership interest of 2,537 megawatts of owned generating capacity, located in the provinces of British Columbia, Alberta, Ontario, Québec, New Brunswick, the States of Wyoming, Massachusetts, Minnesota and the State of Western Australia. Our objectives are to (i) provide stable, consistent returns for investors through the ownership of, and investment in, highly contracted renewable and natural gas power generation and other infrastructure assets that provide stable cash flow primarily through long-term contracts with strong counterparties; (ii) pursue and capitalize on strategic growth opportunities in the renewable and natural gas power generation and other infrastructure sectors; (iii) maintain diversity in terms of geography, generation and counterparties; and (iv) pay out 80 to 85 per cent of cash available for distribution to the shareholders of the Company on an annual basis.
Cautionary Statement Regarding Forward Looking Information
This News Release includes "forward-looking information", within the meaning of applicable Canadian securities laws, and "forward-looking statements", within the meaning of applicable United States securities laws, including the United States Private Securities Litigation Reform Act of 1995 (collectively referred to herein as "forward-looking statements"). In particular, this News Release contains forward-looking statements including, but not limited to, statements relating to: the Financing, including that the gross proceeds will be approximately AUD$800 million; the terms of the Notes, including that they will bear interest at a rate of 4.07% per annum, payable quarterly and maturing on June 30, 2042; that the Financing will close on or around October 22, 2020; and the anticipated use of proceeds. The material factors and assumptions used in the preparation of the forward-looking statements contained herein, which may prove to be incorrect, include, but are not limited to, assumptions pertaining to interest and foreign exchange rates; investment values; hedging activities; global equity and capital markets (including continued access to equity and debt markets); industry sector and the Company's and Issuer's financial conditions (including developments and volatility arising from the current pandemic health event resulting from the novel coronavirus (COVID-19); business competition and other general economic, political and market factors in North America, Australia and internationally. Factors that may adversely impact what is expressed or implied by forward-looking statements contained in this News Release include, but are not limited to, risks relating to the Issuer's ability to satisfy the conditions of closing the Financing, including obtaining any required consents and documents and the need to negotiate and execute the Financing documents; the need for continued cooperation of the initial purchasers; the need to successfully market the offering; global economic climate and market volatility, including due to the COVID-19 pandemic; operational risks at the South Hedland power station; litigation risks; currency fluctuations and other risk factors contained in the Company's Annual Information Form and Management's Discussion and Analysis for the year end dated December 31, 2019. Readers are cautioned not to place undue reliance on the forward-looking statements, which reflect the Company's expectations only as of the date hereof. TransAlta disclaims any intention or obligation to publicly update these forward-looking statements to reflect new information, future events or otherwise, except as required by applicable laws.
SOURCE TransAlta Renewables Inc
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