SunEdison and TerraForm Power announced the closing of the acquisition of Atlantic Power's 521-MW portfolio of operating wind power plants. With the closing, SunEdison has the second warehouse facility, named “TerraForm Private Warehouse,” to hold the acquired assets for up to 7 years. TerraForm Power has an exclusive call right over the warehoused operating assets, and expects to add them to the company's portfolio over time beginning with drop downs in the second half of 2016.
TerraForm Private Warehouse is $525 million in aggregate size, with equity provided by leading infrastructure investors Macquarie Capital, John Hancock, and SunEdison. Morgan Stanley, Citi, and Goldman Sachs led the structuring of TerraForm Private Warehouse and provided debt in the form of a 7-year term loan.
The acquired wind power plants are located in Idaho and Oklahoma, and are contracted under long -term PPAs with investment grade utilities with a weighted-average credit rating of A3. The PPAs have a weighted-average remaining life of approximately 18 years. The portfolio is expected to generate average annual adjusted EBITDA of approximately $56 million and average annual cash available for distribution (CAFD) of $44 million over the next 10 years.
"The TerraForm Private Warehouse is integral to securing the future growth of the SunEdison-TerraForm platform, and provides repeatable and scalable funding,” stated Brian Wuebbels, SunEdison chief financial officer. “Based on the success of our first and second warehouses, we anticipate adding additional warehouse vehicles to address future acquisition opportunities."
"The Creation of the TerraForm Private Warehouse gives TerraForm Power additional flexibility to drive growth while enhancing visibility of our growth trajectory," said Carlos Domenech, TerraForm Power chief executive officer. "TerraForm Private Warehouse creates a storage tank of growth supported by long-term, contracted operating assets which are expected to generate $44 million of annual cash flow."
SunEdison Services will perform operation and maintenance for three of the five wind power plants in this transaction. SunEdison Services provides global 24/7 asset management, monitoring and reporting services.