Northland Power to back 60 MW of solar farms with USD-232m bond

Oct 6, 2014 - Canada-based Northland Power Inc (TSE:NPI) said Friday it will sell some USD 232 million (EUR 185.3m) in bonds to support 60 MW of solar power plants in Ontario, Canada.

More specifically, the company is to use the proceeds for its six 10-MW ground-mounted solar phase projects, which have been feeding electricity to the Ontario grid since mid-2013 under 20-year feed-in-tariff (FiT) power purchase agreements (PPA). Thus, Northland will repay existing bank borrowings, settle associated interest rate swap and transaction costs, and use the remainder for general corporate purposes.

The Canadian power producer’s unit Northland Power Solar Finance One LP, the one issuing the bonds, has signed an agency agreement for the private bond placement with a syndicate of investment dealers, which includes BMO Nesbitt Burns Inc, National Bank Financial Inc and Casgrain & Co Ltd. Scotia Capital Inc and CIBC World Markets Inc lead the offering.

The senior secured amortising bonds, maturing in June 2032, will have a 4.397% annual coupon. They are non-recourse to the company and are backed by Northland's six solar farms. "This marks the third time Northland subsidiaries have issued project bonds, and is our first issuance backed by renewable power assets,” CFO Paul Bradley noted.

The sale is subject to customary conditions. It is expected to conclude on October 8, pursuant to which the proceeds will be transferred through intercompany loans to six wholly-owned subsidiaries of Northland.

(USD 1 = EUR 0.799)

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