By Lisa Kerner
Charlotte, N.C., Sept. 26 - Ormat Technologies, Inc. provided additional details about subsidiary OFC 2 LLC's previously announced $350 million 20-year note purchase agreement with John Hancock Life Insurance Co. (USA) as administrative agent.
Proceeds will be used for three geothermal power facilities located in Nevada.
Wilmington Trust Co. is the note trustee, according to a form 8-K filed with the Security and Exchange Commission.
OFC 2, ORNI 15 LLC, ORNI 39 LLC, ORNI 42 LLC and HSS II, LLC will issue the notes in six series in two tranches associated with the phased construction of the power facilities.
The phase I tranche will total up to $180 million and will be comprised of up to $155 million of series A notes and up to $25 million of series B notes.
The phase II tranche will total up to $170 million and will be comprised of one or more of series C notes, series D notes, series E notes and series F notes.
The issues will determine if phase II construction will take place.
Payment of 80% of the principal and interest on the notes is guaranteed by the Department of Energy's Loan Programs Office under Section 1705 of Title XVII of the Energy Policy Act of 2005 of the department's Loan Guarantee Program, an Ormat news release said.
Each series of notes will bear interest at a rate calculated based on a spread over the Treasury yield curve that will be set at least 10 business days prior to the issuance of the notes.
Interest will be payable quarterly.
Subject to approval from the Energy Department, the interest rate on the series A notes has been set at 4.687% if the notes are issued prior to Oct. 31.
The note purchase agreement contains customary affirmative and negative covenants including maintenance of the issuers' geothermal business and restrictive covenants that limit the issuers' ability to incur other debt and pay dividends.
Reno, Nev.-based Ormat Technologies is a geothermal and recovered energy power business.
| Issuers: | OFC 2 LLC, ORNI 15 LLC, ORNI 39 LLC, ORNI 42 LLC and HSS II, LLC
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| Issue: | Senior notes
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| Amount: | $350 million
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|
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| Phase I tranche
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| Amount: | Up to $180 million
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| Series: | Up to $155 million of series A notes, up to $25 million of series B notes
|
| Coupon: | 4.687% for series A notes (subject to DOE approval)
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|
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| Phase II tranche
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| Amount: | Up to $170 million
|
| Series: | One or more of series C notes, series D notes, series E notes and series F notes
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