TerraForm Global Inc. subsidiary Terraform Global Operating LLC is proposing to offer up to $400 million of senior notes due 2026 to redeem its outstanding senior notes due 2022.
The move prompted S&P Global Ratings to upgrade the TerraForm Global's corporate credit rating to BB- from B+ and its stand-alone credit profile to "b+" from "b." S&P Global Ratings also assigned a BB rating and 2 recovery rating to the company's new 2026 notes.
The rating agency, which has a stable outlook on the company, anticipates that the refinancing will "substantially reduce the debt balance." Moreover, S&P Global Ratings said the upgrade is an indirect result of the company's recent acquisition of Brookfield Asset Management Inc.
"Under SunEdison Inc., [TerraForm Global] had vastly underperformed our expectations, which resulted in numerous downgrades after its initial rating in 2015. The portfolio's struggles were largely related to an aggressive growth strategy, which we expect to be discontinued," S&P Global Ratings analysts said in a Feb. 7 report.
The notes will be offered in a private transaction, subject to market conditions and other factors.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.
