Aquila European Renewables Income Fund (AERIF) has announced bond refinancing for the 400MW Oyfjellet wind farm in Norway, also known as The Rock
A wholly-owned subsidiary of AERIF holds a 13.7% interest in the project.
The bond refinancing comprises a US private placement (USPP) of €235m and a green bond of €80m, representing a combined issuance amount of €315m (on a 100% interest basis).
The USPP notes are rated investment grade and both bond issuances were oversubscribed.
On 10 June, AERIF announced it had increased its commitment to The Rock by up to €35.6m to provide bridge financing, given that certain conditions under the project’s existing debt financing agreement prevented the draw-down of the senior debt in place.
The proposed bond refinancing was pursued in order to allow the project to immediately benefit from access to debt financing at attractive terms.
The bond refinancing is expected to be accretive to the economic returns of the project.
Proceeds from the bond refinancing will be used to fund remaining construction and other project costs, repay the Bridge provided by each of the project shareholders and return surplus capital to the project’s shareholders.
In connection with the bond refinancing, the AERIF subsidiary expects to receive total proceeds of approximately €23m.
This will comprise approximately €19m, representing the full repayment of the bridge finance.
Funds are expected to be received shortly; and approximately €4m in surplus capital, which is expected to be paid over time during the remainder of the construction period.
Together with the AERIF’s recently announced capital raising, proceeds from the bond refinancing will be used to repay any outstanding debt under its revolving credit facility (currently drawn to €10m), as well as funding the Company’s attractive pipeline of investment opportunities.
AERIF chairman Ian Nolan said: “We are pleased to announce the first debt capital markets issuance for AERIF via its investment in The Rock.
“In addition to the economic benefits associated with the refinancing, we are happy to have launched the Company’s first green bond, further augmenting our participation in the green energy transition.”
Michael Anderson, senior manager at Aquila Capital, the investment adviser to AERIF said: “This is an important milestone for The Rock, the Aquila European Renewables Income Fund and Aquila Capital as the project advances closer toward completion.
“The refinancing was concluded at attractive terms and further diversifies the company’s sources of debt funding.
“We are very happy to see the transaction supported by such a high quality investor base.”