Atlantic Power launches $600 million term loan B at Libor plus 400 bps

By Sara Rosenberg

New York, Feb. 3 - Atlantic Power LP launched on Monday its $600 million seven-year term loan B with price talk of Libor plus 400 basis points with a 1% Libor floor and an original issue discount of 99, according to a market source.

The B loan has 101 soft call protection for one year and leverage and interest coverage covenants, the source said.

Mandatory prepayments are from proceeds of assets sales, insurance proceeds and incurrence of debt, in each case subject to applicable thresholds and customary carve-outs, and 50% of excess cash flow.

The company's $800 million senior secured credit facility (Ba3/B+) also includes a $200 million four-year revolver.

Security is a pledge of the equity interests in the company and its subsidiary guarantors, a pledge of certain material contracts and certain mortgages over material real estate rights, an assignment of all revenues, funds and accounts of the company and its subsidiary guarantors and certain other assets.

Commitments are due on Feb. 14, the source added.

Goldman Sachs Bank USA and Bank of America Merrill Lynch are the joint lead arrangers on the term loan and the revolver, and RBC Capital Markets and Union Bank are leads on the revolver as well.

Proceeds will be used to refinance an existing $150 million revolver; to redeem $190 million of 5.9% senior notes, $150 million of 5.87% senior guaranteed notes series A and $75 million 5.97% senior guaranteed notes series B; to provide for ongoing working capital needs and general corporate purposes; to support collateral support obligations to contract counterparties; to fund a debt service reserve; and to possibly repurchase 9% senior unsecured notes.

Closing on the credit facility is subject to syndication, the conclusion of negotiations, execution of final documentation, receipt of necessary approvals and satisfaction of customary conditions.

Atlantic Power LP, a subsidiary of Atlantic Power Corp., a Boston-based owner and operator of power generation assets, has 1,173 megawatts of hydro, natural gas and generation capacity and contracts in place for a majority of the capacity with a remaining average life of over seven years.

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