Atlantic Power Corporation reprices its $615 million senior secured term loan and $200 million senior secured revolving credit facility

Written By: Stratton Report
April 17, 2017

On April 17, Atlantic Power Corporation announced a repricing of the $615 million senior secured term loan and $200 million senior secured revolving credit facility at its APLP Holdings Limited Partnership sub.

According to Atlantic, the interest rate margin on the term loan and revolver was reduced by 75 basis points to LIBOR plus 425 basis points, while the LIBOR floor remains at 1.00% and the mandatory 1% annual amortization and cash sweep provisions of the term loan are unchanged.  

As a result of the repricing, Atlantic Power expects cost savings for the remainder of 2017 of to equal $2.4 million, net of fees related to the transaction that will be recorded in the second quarter, with cumulative net savings through the maturity dates of the term loan (April 2023) and revolver (April 2021) estimated at approximately $17 million.

Atlantic stressed that it is permitted to prepay the term loan in the first six months following this transaction at a 1% premium.  Following the six-month period, prepayment is permitted at par. 

Terrence Ronan, Executive Vice President and Chief Financial Officer of Atlantic Power remarked:

We are pleased to have achieved a reduction in the cost of our term loan and revolver, which will increase our cash flow. The tighter spread was the result of improved credit market conditions as well as the progress we have made in reducing our leverage, which we expect will continue with debt reduction of $150 million or more in 2017.