Innergex Renewable wraps refinancing with C$912.6 million green bonds

By William Gullotti

Buffalo, N.Y., Aug. 8 – Innergex Renewable Energy Inc. completed refinancing C$1.032 billion of non-recourse debt of its wholly owned assets with a C$912.6 million issue of green bonds due 2036 and a C$119.7 million letter-of-credit facility, according to a press release on Friday.

According to the release, the combined transactions will optimize the company’s capital structure and returns for its Chilean operations by adding debt to previously unencumbered assets. More specifically, the refinancing consisted of a balloon payment of C$178.7 million and the entirety of the aforementioned letter-of-credit facility.

The refinanced portfolio is composed of a combination of solar, wind and hydro assets as well as battery energy storage systems. Three Aela wind farms, acquired this year, are part of the portfolio with some of the proceeds from the green bond issuance used as financing for the acquisition.

Overall, the portfolio received an investment-grade rating, with the green bonds priced at competitive levels in the U.S. Treasuries. The issuance of green bonds is related to the forward start interest rate swaps entered into on Feb. 17, 2022 with an aggregate notional amount of C$425.8 million in order to manage its exposure to the risk of increasing interest rates on a portion of the expected refinancing of the acquisition of Aela wind farms and the existing Chilean projects.

On July 25, 2022, the interest rate swaps previously entered into were settled in favor of Innergex, for C$53.1 million. Additionally, the unwind of interest rate swaps related to the current financings will provide an additional C$18.8 million of cash.

SMBC and CIBC World Markets Corp. acted as placement agent (books) and co-agent, respectively, for this transaction.

SMBC also acted as financial adviser in respect of the structuring of the transaction, as sole green bond coordinator and as sole issuing bank of the letter-of-credit facility.

The transaction represents Latin America’s largest private placement deal in recent history.

Longueil, Quebec-based Innergex is a developer and operator of renewable power generating facilities.

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