DEDHAM, Mass., March 18, 2020 /PRNewswire/ -- Atlantic
Power Corporation (NYSE: AT) (TSX: ATP) ("Atlantic Power" or the
"Company") announced that on March 18,
2020, it executed an amendment to its senior secured
revolving credit facility ("Revolver"). The amendment provides for
an extension of the Revolver maturity date to April 2025, to coincide with the maturity date of
the senior secured term loan ("Term Loan"). Both the Revolver and
the Term Loan are at the Company's APLP Holdings Limited
Partnership ("APLP Holdings") subsidiary. At February 29, 2020, the Company had no borrowings
under the Revolver but was utilizing $78.2
million for letters of credit.
In conjunction with the extension, the Revolver capacity was
reduced to $180 million from
$200 million previously. The
amendment allows an upsizing of the Revolver capacity by up to
$30 million, to a maximum aggregate
amount of $210 million, subject to
approval of the two letter of credit issuer banks and increased
commitments by existing or new lenders. Such an upsizing would not
require a further amendment. There were no other significant
changes to the terms of the Revolver.
As previously disclosed in the Company's February 3, 2020 press release, the pricing of
the Term Loan and Revolver was reduced to 250 basis points over
LIBOR effective January 31, 2020.
"We are pleased to have extended our Revolver maturity by three
years to coincide with the recent extension of our Term Loan
maturity date. The Revolver extension, together with our cash
position, provides us with strong liquidity through April 2025," said Terrence Ronan, Executive Vice President and
Chief Financial Officer of Atlantic Power. "To date the primary use
of the Revolver has been to support letters of credit, the need for
which will be reduced following the sale of our Manchief plant in
2022. The balance of the Revolver is available for other purposes
such as asset acquisitions."
"Today job one is to ensure the safety and health of our
employees while continuing to generate electric power for our
customers. Our people and our plants are performing terrifically in
these tough times," said James J. Moore,
Jr., President and Chief Executive Officer of Atlantic
Power. "On the financial front, the actions that we have taken over
the past several years to reduce costs and repay debt enable
Atlantic Power to withstand difficult environments, in the power
markets or more broadly. The extension of our Revolver to match the
recent extension of our Term Loan maturity is a good outcome for
us."
Mr. Moore continued, "We have highly contracted EBITDA and
operating cash flow. More than 95% of our cumulative EBITDA and
operating cash flow through 2024 is generated under Power Purchase
Agreements (PPAs) with an average remaining term of approximately
six years. These PPAs are predominantly with investment grade
counterparties. We plan to continue allocating the majority of this
strong cash flow to debt repayment, and expect to amortize the
balance of our Term Loan by the April
2025 maturity. During this five-year period we expect to
generate significant discretionary cash flow after debt repayment,
as we noted on our fourth quarter 2019 conference
call."
"After years of rebuilding our financial strength, we are now
well positioned for periods of market turmoil. We invested
$45 million in the acquisition of
biomass and hydro projects (and project interests) in 2018 and
2019. These acquisitions are producing strong returns in line with
our expectations. We stand ready to do more acquisitions if and
when values are compelling. We also have repurchased $6.7 million of common shares and Cdn$8.4 million (approximately US$6.0 million equivalent) of preferred shares
under our normal course issuer bid this year to date."
The Company expects to record fees associated with the extension
of the Revolver as an expense in the first quarter of 2020.
About Atlantic Power
Atlantic Power is an independent power producer that owns power
generation assets in eleven states in the
United States and two provinces in Canada. The Company's generation projects sell
electricity and steam to investment-grade utilities and other
creditworthy large customers predominantly under long‑term PPAs
that have expiration dates ranging from 2020 to 2043. The Company
seeks to minimize its exposure to commodity prices through
provisions in the contracts, fuel supply agreements and hedging
arrangements. The projects are diversified by geography, fuel type,
technology, dispatch profile and offtaker (customer). Approximately
75% of the projects in operation are 100% owned and directly
operated and maintained by the Company. The Company has expertise
in operating most fuel types, including gas, hydro, and biomass,
and it owns a 40% interest in one coal project.
Atlantic Power's shares trade on the New York Stock Exchange
under the symbol AT and on the Toronto Stock Exchange under the
symbol ATP. For more information, please visit the Company's
website at www.atlanticpower.com or contact:
Atlantic Power Corporation
Investor Relations
(617) 977-2700
info@atlanticpower.com
Copies of the Company's financial data and other publicly filed
documents are available on SEDAR at www.sedar.com or on EDGAR at
www.sec.gov/edgar.shtml under "Atlantic Power Corporation" or on
the Company's website.
Cautionary Note Regarding Forward-Looking Statements
To the extent any statements made in this news release contain
information that is not historical, these statements are
forward-looking statements within the meaning of Section 27A of the
U.S. Securities Act of 1933, as amended, and Section 21E of the
U.S. Securities Exchange Act of 1934, as amended, and under
Canadian securities law (collectively, "forward-looking
statements").
Certain statements in this news release may constitute
"forward-looking statements", which reflect the expectations of
management regarding the future growth, results of operations,
performance and business prospects and opportunities of the Company
and its projects. These statements, which are based on
certain assumptions and describe the Company's future plans,
strategies and expectations, can generally be identified by the use
of the words "may," "will," "project," "continue," "believe,"
"intend," "anticipate," "expect" or similar expressions that are
predictions of or indicate future events or trends and which do not
relate solely to present or historical matters. Examples of
such statements in this press release include, but are not limited,
to statements with respect to the following:
- The Company's expectation that the Revolver extension together
with its cash position will provide strong liquidity through
April 2025;
- the Company's expectation that the need for letters of credit
will be reduced following the sale of Manchief in 2022;
- the Company's view of the performance of its employees and its
plants;
- the Company's view that it has the ability to withstand
difficult environments, in the power markets or more broadly;
- the Company's view of its EBITDA and operating cash flow
through 2024;
- the Company's plans for debt repayment and its expectation of
being able to repay the balance of the Term Loan by maturity from
operating cash flow;
- the Company's expectation that it will generate significant
discretionary cash flow after debt repayment in the next five
years;
- the Company's view of its financial strength and that it is
well positioned for periods of market turmoil;
- the Company's view of returns generated by its biomass and
hydro acquisitions, and its ability to undertake additional
acquisitions if values are compelling; and
- the Company's expectation that it will record fees associated
with the extension of the Revolver as an expense in the first
quarter of 2020.
Forward-looking statements involve significant risks and
uncertainties, should not be read as guarantees of future
performance or results, and will not necessarily be accurate
indications of whether or not or the times at or by which such
performance or results will be achieved. Please refer to the
factors discussed under "Risk Factors" and "Forward-Looking
Information" in the Company's periodic reports as filed with the
U.S. Securities and Exchange Commission (the "SEC") from time to
time for a detailed discussion of the risks and uncertainties
affecting the Company. Although the forward-looking
statements contained in this news release are based upon what are
believed to be reasonable assumptions, investors cannot be assured
that actual results will be consistent with these forward-looking
statements, and the differences may be material. These
forward-looking statements are made as of the date of this news
release and, except as expressly required by applicable law, the
Company assumes no obligation to update or revise them to reflect
new events or circumstances.
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SOURCE Atlantic Power Corporation