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TerraForm Power raises stock offering to $600M

TerraForm Power Inc. plans to sell up to $600 million of common stock to help finance its acquisition of Saeta Yield SA, a Spanish renewable energy company with more than 1,000 MW of contracted assets.

TerraForm Power initially planned to fund a portion of the deal through a $400 million equity offering. However, CEO John Stinebaugh said May 2 said that the company was considering increasing the amount of equity to ensure "ample access to liquidity" amid sustained volatility in the capital markets.

At least 51% of the Class A shares that are being offered are expected to be bought by TerraForm Power's sponsor, Brookfield Asset Management Inc., or an affiliate to maintain its current ownership stake, TerraForm Power said in a securities filing May 29. Brookfield agreed to backstop the equity offering at a price of $10.66 per share.

TerraForm Power shares were down slightly at $10.91 at about 2 p.m. ET on May 29.

TerraForm Power and Brookfield Asset Management did not immediately respond to requests for comment on May 29.

"We're seeing volatility in the market that we think [is] going to continue for some period of time," Stinebaugh said on an earnings call May 2. "And we do have an objective of continuing to deleverage the balance sheet and think it's prudent to consider increasing the size of equity up to $650 million," he added, saying the Saeta transaction "still will be very accretive" at that level.

TerraForm Power offered to buy Saeta for €12.20 per share. If it acquires all of the remaining Saeta shares, the total purchase price would be approximately $1.2 billion.

TerraForm Power owns and operates a 2,600-MW portfolio of wind and solar power assets that are located primarily in the U.S.