US Solar refinances legacy loans in Heelstone Portfolio – US Solar Fund has refinanced the existing debt facilities associated with its Heelstone Portfolio – a portfolio of 22 projects acquired in 2020.
The refinancing transaction required approximately $92m of the $132m recently raised by the company, while a new debt facility will be provided by Fifth Third Bank National Association. Alongside a portion of the proceeds from USF’s recent capital raise, this will be used to repay all of the existing project level debt. The new debt facility has a tenor of 7 years but is fully amortized over approximately 17 years to match the duration of the underlying power purchase agreements.
This refinancing will reduce the effective interest rate for the Heelstone Portfolio from around 6.25% to less than 3% per year. The base interest rate is fully hedged for the term of the newly issued debt. Overall gearing for USF will also be lowered to approximately 40%, reducing sensitivity to changes in key assumptions including long-term power prices, and enhancing dividend coverage.
USF : US Solar refinances legacy loans in Heelstone Portfolio