TerraForm Power updates financing plans for Vivant, Invenergy, no longer issuing equity

By Lisa Kerner

Charlotte, N.C., July 27 – TerraForm Power, Inc. is no longer issuing equity to finance the acquisition of contracted power portfolios from Vivint Solar and Invenergy Wind LLC because the equity is believed to be undervalued, according to chief executive officer Carlos Domenech.

The company will use cash on hand and incremental debt, and will move one of the Invenergy assets to a new warehouse facility. TerraForm also has fully committed financing from its bank group for both acquisitions, Domenech said during a conference call on Monday.

Specifically, TerraForm will use $610 million of cash on hand, $358 million of assumed project debt, $261 million of new project debt and a new $200 million Holdco bond, for a total of $1.429 billion, to fund 523 MW of Vivant solar assets and 265 MW of Invenergy assets.

The Bethesda, Md.-based clean energy company will use a new $1.588 billion warehouse facility through SunEdison, Inc. to fund the remaining 665 MW of the Invenergy assets.

Following the acquisitions, pro forma cash on hand will be $50 million. The company will have total liquidity of $646 million, including the undrawn five-year credit facility, said Domenech.

TerraForm will have pro forma adjusted net debt-to-run-rate EBITDA of 5.1 times, up from 3.8 times.

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