Altius subsidiaries acquire $247 million financing agreement

By William Gullotti

Buffalo, N.Y., Oct. 31 – Altius Renewable Royalties Corp. said some subsidiaries of its 50%-owned Great Bay Renewables joint venture entered into senior secured credit financing agreements totaling $247 million, according to press releases on Tuesday.

The agreements are comprise a $123.5 million initial term facility, a $100 million delayed-draw term facility and a $23 million letter of credit facility, with the two term facilities qualifying for green loan eligibility.

Each facility has an initial term of five years.

Repayments of borrowings will be based on expected interest rates based on a 20-year amortization period, but borrowings may be repaid at any time without penalty.

The initial term facility will be used for closing costs and to return capital to Great Bay’s parent shareholders. The joint owners intend to reinvest the debt proceeds back into Great Bay as future royalty investment opportunities arise.

The delayed-draw facility will be made available in tranches for future royalty acquisitions. With an availability period of three years, borrowing amounts available to Great Bay will be determined by expected revenue parameters, with adjustment factors for merchant vs. contract weighting and renewable energy source.

The letter of credit facility is intended to accommodate debt service reserve requirements and for development stage renewable royalty investment support.

In connection with the financing, Great Bay entered into a floating-to-fixed interest rate swap to lock in approximately 100% of the interest rate on the initial term loan for the full term of the debt. Additionally, Great Bay entered into a floating-to-fixed interest rate swap to lock in approximately 50% of the initial draw beyond the initial term for the amortization period to reduce refinancing risk. The company expects the interest rate on the fixed portion of the debt to be approximately 6.4% per annum, excluding financing closing costs for the first three years, and approximately 6.5% for the last two years of the term of the loan.

Great Bay may also enter into additional interest rate swaps to lock in interest rates for the delayed-draw facility.

The facilities are intended to finance or reimburse investments previously made in eligible green collateral projects.

Great Bay was advised on this transaction by the legal teams at Vinson & Elkins LLP and Pierce Atwood LLP, and the advisory team at Apterra Infrastructure Capital.

MUFG Bank and Natixis CIB are the coordinating lead arrangers, bookrunners, syndication agents and hedge providers for the facilities.

Altius is a renewable energy royalty company with a diversified portfolio of utility scale wind and solar energy royalties. Great Bay Renewables, LLC is a joint venture between Altius and Apollo Global Management, Inc.

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