TerraForm debt commitment would repay two loans, 5 7/8%, 6 1/8% notes

By Wendy Van Sickle

Columbus, Ohio, March 9 – TerraForm Power, Inc. sponsor Orion US Holdings 1 LP entered a debt commitment and arrangement letter dated Monday with four banks with total proceeds sufficient to repay or refinance two bank facilities and to redeem, defease or repurchase TerraForm Power Operating, LLC’s 5 7/8% senior notes due 2023 and its 6 1/8% senior notes due 2025, according to an 8-K filing with the Securities and Exchange Commission.

Specifically, the proceeds would refinance TerraForm Power Operating’s credit and guaranty agreement dated Jan. 28, 2015 with Barclays Bank plc as administrative agent and TerraForm Private Operating II, LLC’s credit and guaranty agreement dated Dec. 15, 2015 with Citibank, NA as administrative agent.

The committing lenders are BMO Capital Markets Corp., Bank of Nova Scotia, Natixis Securities Americas LLC and RBC Capital Markets.

TerraForm also entered an agreement with the sponsor’s parent, Brookfield Asset Management Inc., under which Brookfield would commit up to a $500 million revolving unsecured credit line to TerraForm.

The financing agreements relate to TerraForm’s Monday merger and sponsorship transaction agreement with Orion as sponsor. Under that agreement, TerraForm is set to merge with Orion subsdiary BRE TERP Holdings Inc., leaving TerraForm the surviving company and Orion owning about a 51% interest in it.

TerraForm is a Bethesda, Md., owner and operator of clean energy power plants.

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