Georgia Power, Oglethorpe get 30-year multi-advance loans for Vogtle

By Susanna Moon

Chicago, Feb. 21 - Georgia Power Co. and Oglethorpe Power Corp. each obtained a 30-year multi-advance term loan facility for the construction of two new nuclear generating units at Plant Vogtle in Burke County, Ga.

The companies entered into the loan guarantee agreement with the U.S. Department of Energy on Thursday, in which the Energy Department agreed to guarantee the company's loan obligations under the facilities, according to two separate 8-K filings with the Securities and Exchange Commission.

For Georgia Power, aggregate borrowings under the facility may not exceed the lesser of 70% of eligible project costs or about $3.46 billion.

For Oglethorpe, loans may not exceed the lesser of 70% of eligible project costs or $3,057,000,000, $335 million of which is designated for capitalized interest.

Advances may be requested under the facilities on a quarterly basis through Dec. 31, 2020. In connection with the initial closing of the agreement, Georgia Power drew a principal amount of $1 billion and Oglethorpe drew $725 million.

Interest will be the Treasury rate plus a spread of 37.5 basis points.

For Georgia Power, the rate for $500 million of the initial advance under the facility is 3.86% for an interest period that extends to the final maturity date, and the rate for the remaining $500 million is 3.488% for an interest period that extends to Feb. 20, 2029.

For Oglethorpe, the rate will be 3.867% for an interest rate period that extends to the final maturity date.

Midland Loan Services, Inc., a division of PNC Bank, NA, is the collateral agent.

All borrowings under the facility are full recourse to Georgia Power. Under the agreement, Georgia Power is obligated to reimburse the Energy Department if it is required to make any payments to Federal Financing Bank under the DOE Guarantee.

The final maturity date for each advance is Feb. 20, 2044. Principal payments will begin Feb. 20, 2020.

In connection with the agreement, Georgia Power incurred issue costs of about $67 million, which will be amortized over the life of the borrowings under the facility. Oglethorpe incurred costs of about $51 million, also to be amortized.

Any prepayment will be made with a make-whole premium or discount.

Georgia Southern is an electric subsidiary of Southern Co. is based in Atlanta. Oglethorpe is a not-for-profit electric membership corporation based in Tucker, Ga.

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