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NextEra pipeline subsidiary enters $604 million term loan agreement
By Wendy Van Sickle
Columbus, Ohio, June 30 – NextEra Energy Partners, LP indirect subsidiary NET Mexico Pipeline Partners, LLC entered into an amended and restated limited-recourse variable-rate term loan agreement on Wednesday for a total of about $604 million, according to an 8-K filing with the Securities and Exchange Commission.
The amended and restated agreement refinanced roughly $532 million of previously outstanding term loans, and about $72 million of previously unused loan commitments was also borrowed.
In addition, the period before principal payments are required was extended and a letter-of-credit facility was reduced to $36 million from $60 million.
Quarterly principal payments on the term loan, ranging from about $5 million to $10 million, begin in March 2021 and a final payment of roughly $564 million is due in June 2022.
Interest is payable quarterly and is based on Libor plus a margin that was not specified in the filing. However, NET Mexico entered into interest rate swaps to hedge against rate movements with respect to substantially all interest payments on the term loan.
The $72 million in additional borrowings was used to pay transaction costs and the remaining funds were distributed to NET Mexico’s owners, based on their respective ownership interests. The NextEra subsidiary that owns 90% of NET Mexico will use its portion of the funds for general business purposes.
The letter-of-credit facility will primarily be used to support a debt service reserve associated with the financing.
NextEra is a Juno Beach, Fla.-based power provider. NET Mexico completed construction of a natural gas transmission pipeline at the border between the United States and Mexico in Starr County, Texas, in November 2014 to supply natural gas to Mexico.
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