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Atlantic Power readies $800M leveraged loan backing refi, distribution to parent

atlantic power logoGoldman Sachs and Bank of America Merrill Lynch are holding a bank meeting at 1:30 p.m. EST on Monday, Feb. 3 to launch a new financing for Atlantic Power L.P. The deal will include a $200 million revolver and a $600 million, seven-year B term loan.

Proceeds will be used to refinance debt and fund a distribution to the issuer’s publicly held parent, Atlantic Power Corp.

Atlantic Power L.P. operates 17 generating stations that produce roughly 1173 net megawatts of power in six states and two Canadian provinces. About 1073 megawatts of that offtake is contracted under long-term power purchase agreements with a remaining weighted average contract life of 7.1 years, sources noted.

The new revolver will replace the issuer’s current $150 million RC. The distribution to Atlantic Power Corp. would help to redeem a portion of its 9% notes due 2018, as well as the $190 million of 5.9% notes due 2014 issued by Curtis Palmer LLC; along with $150 million of 5.87% of Series A guaranteed notes due 2015 and $75 million of 5.97% Series B guaranteed notes due 2017 issued by Atlantic Power (US) GP.

The loans will be governed by total-leverage and interest-coverage tests.  In addition, Atlantic Power L.P.’s existing $210 million of 5.95% medium term notes due June 23, 2036 would receive an equal and ratable security interest in the collateral package securing the new credit facilities.

Parent Atlantic Power owns and operates a diverse fleet of power generation assets in the US and Canada. – Chris Donnelly