- 521-MW operating asset acquisition, with expected annual average CAFD of $44 million over the next 10 years, increases TerraForm Power's drop down inventory to more than 4 GW
- $525 million operating asset warehouse facility, named TerraForm Private Warehouse, funds acquisition and will be operated by SunEdison
- Macquarie Capital and John Hancock lead equity investment in TerraForm Private Warehouse
- TerraForm Power has exclusive call right to drop down operating assets from warehouse facility
MARYLAND HEIGHTS, Missouri and BETHESDA, Maryland, June 29, 2015 /PRNewswire/ -- SunEdison, Inc. (NYSE: SUNE), the world's largest renewable energy development company, and TerraForm Power, Inc. (Nasdaq: TERP), an owner and operator of clean energy power plants, today announced the closing of the acquisition of Atlantic Power's 521-megawatt (MW) portfolio of operating wind power plants.
Concurrent with the closing, SunEdison has formed its second warehouse facility, named TerraForm Private Warehouse, to hold the acquired operating assets from Atlantic Power for a maximum period of 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 power purchase agreements (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.
"We're pleased to complete the closing of Atlantic Power's operating assets utilizing TerraForm Private Warehouse, our new operating asset warehouse facility," stated Brian Wuebbels, SunEdison chief financial officer. "This warehouse is integral to securing the future growth of the SunEdison-TerraForm platform, and provides repeatable and scalable funding. Based on the success of our first and second warehouses, we anticipate adding additional warehouse vehicles to address future acquisition opportunities."
"SunEdison's 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. TerraForm Power's ability to exclusively call these operating assets for drop down will support our intention to provide predictable CAFD and dividend growth for our shareholders for years to come."
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.
SunEdison is the world's largest renewable energy development company and is transforming the way energy is generated, distributed, and owned around the globe. The company develops, finances, installs, owns and operates renewable power plants, delivering predictably priced electricity to its residential, commercial, government and utility customers. SunEdison is one of the world's largest renewable energy asset managers and provides customers with asset management, operations and maintenance, monitoring and reporting services. Corporate headquarters are in the United States with additional offices and technology manufacturing around the world. SunEdison's common stock is listed on the New York Stock Exchange under the symbol "SUNE." To learn more visit www.sunedison.com.
About TerraForm Power
TerraForm Power is a renewable energy leader that is changing how energy is generated, distributed and owned. TerraForm Power creates value for its investors by owning and operating clean energy power plants. For more information about TerraForm Power, please visit: http://www.terraform.com.
Safe Harbor Disclosure
This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are subject to certain risks, uncertainties and assumptions, including with respect to expected Adjusted EBITDA, cash available for distribution, earnings, future growth and financial performance, and typically can be identified by the use of words such as "expect," "estimate," "anticipate," "forecast," "intend," "project," "target," "plan," "believe" and similar terms and expressions. Forward-looking statements are based on current expectations and assumptions. Although SunEdison and TerraForm Power believe that their expectations and assumptions are reasonable, they can give no assurance that these expectations and assumptions will prove to have been correct, and actual results may vary materially. Factors that could cause actual results to differ materially from those set forth in the forward-looking statements include, among others: the failure by TerraForm Power to acquire assets from TerraForm Private Warehouse at reasonable prices, or at all, the failure of counterparties to fulfill their obligations under offtake agreements; price fluctuations, termination provisions and buyout provisions in offtake agreements; delays or unexpected costs during the completion of projects under construction; the company's ability to successfully identify, evaluate and consummate acquisitions from SunEdison or third parties or changes in expected timing of any acquisitions; government regulation; operating and financial restrictions under agreements governing indebtedness; the company's ability to borrow additional funds and access capital markets; the company's ability to compete against traditional and renewable energy companies; the company's ability to integrate acquired power plants, including the First Wind assets; and hazards customary to the power production industry and power generation operations, such as unusual weather conditions and outages. Furthermore, any dividends are subject to available capital, market conditions and compliance with associated laws and regulations.
SunEdison and TerraForm Power undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Adjusted EBITDA and cash available for distribution are estimates as of today's date and are based on assumptions believed to be reasonable as of this date. SunEdison and TerraForm Power expressly disclaims any current intention to update such estimates. The foregoing review of factors that could cause SunEdison or TerraForm Power's actual results to differ materially from those contemplated in the forward-looking statements included in this news release should be considered in connection with information regarding risks and uncertainties that may affect future results included in the company's filings with the Securities and Exchange Commission ("SEC") at www.sec.gov. In addition, TerraForm Power makes available free of charge at www.terraform.com copies of materials it files with, or furnishes to, the SEC.
Cash Available for Distribution (CAFD)
CAFD is a supplemental non-GAAP measure of TerraForm Power's ability to earn and distribute cash to investors. This measurement is not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance, including net income, net cash provided by (used in) operating activities or any other liquidity measure determined in accordance with GAAP, nor is it indicative of funds available to fund our cash needs.
Adjusted EBITDA is a supplemental non-GAAP financial measure which eliminates the impact on net income of certain unusual or non-recurring items and other factors that we do not consider indicative of future operating performance. This measurement is not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance, including net income. The presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.