Boralex has closed agreements to refinance almost all of its wind farm operations in France, for a total of just over €1bn.
The €1.1bn is divided among three credit agreements maturing respectively in 2034, 2036 and 2040, making it the biggest refinancing in the French renewables sector the largest refinancing arrangement in Boralex’s history.
The transaction immediately makes available financial resources totalling more than €123m, achieved primarily by grouping together assets that were previously financed individually through 30 different credit agreements.
The amount will be used to reduce Boralex’s existing corporate credit facility, resulting in greater capacity to fund the development of future projects across the company.
In addition to the amount made available in the corporate credit facility, the financing includes €140m for the construction of short-term projects plus an additional €125m tranche to finance the construction of future projects, which should become available in early 2020.
Boralex said the new revolving tranche will accelerate the development of its future projects, which, when built, will be added to the portfolio of projects benefiting from the terms of the refinancing arrangement.
Taking advantage of the “very good” conditions on the European debt market, the refinancing reduces Boralex’s average interest rate for these assets and projects from 2.70% to 1.75%.
The rate reduction, coupled with the optimization of its capital structure, will cut Boralex’s consolidated annual interest expense by 12%.
Estimated net non-recurring expenses of €12m related mainly to penalties for early repayment will be recorded in the 2019 fourth quarter results.
Boralex chief financial officer Bruno Guilmette said, “This refinancing is a major step forward that will free up significant financial resources and reduce the cost of implementing our strategic plan.
“This refinancing operation increases our financial flexibility and creates an even stronger bond with our European financial partners, who have all expressed great confidence in our leadership and business model, for which I thank them.
“I’d like to thank the banks and our advisors for being such solid partners in this complex undertaking,” said Nicolas Wolff, Boralex vice president and Europe general manager (pictured).
He added, “The success of this refinancing arrangement, the largest in the renewable energy and wind sectors in France, is an expression of confidence in the future of Boralex and more broadly in the renewable energy sector.”
CIC, Bpifrance, Credit Agricole, represented by Credit Agricole Corporate and Investment Bank and Unifergie, along with the Caisse Regionale Nord de France, CaixaBank, and La Banque Postale jointly arranged the financing.