Etrion Corporation, a solar independent power producer that develops, builds, owns and operates utility-scale solar power generation plants in Italy, Chile and Japan, announced completing the refinancing of a majority of the company’s Italian solar parks owned by the Italian subsidiary Etrion spa with a 222 million euros portfolio financing including long-term, non-recourse bank debt and project bonds (download here the press release).
Etrion Corporation is listed on the Toronto Stock Exchange in Canada and on NASDAQ OMX in Stockholm. In its company presentation, Etrion explains that the group is part of the Lundin Group, which in turn is controlleld by the Ludin family ans is made of about 30 listed companies with a 10 billion dollars market cap on the whole.
Headquartered in Rovereto (Trento), Etrion spa is an Italian solar PV investment platform established in 2008 and now owning a sizeable portfolio of large solar ground-mounted plants totalling 53.5 MW, thus emerging as a prominent player in the Italian PV market. The portfolio consists of ten plants located in the Lazio and Puglia regions of Italy. All plants are fully constructed, connected to the grid and operating as planned since 2011. These utility-scale solar plants were built using top-tier module providers and EPC contractors.
As for the refinancing, Etrion spa was provided of 177 million euros of floating project finance loan by the mandated lead arrangers Natixis, Bnp Paribas and Creval, who also provided a 10 million euros debt service reserve facility.
Adding to that, Scor Infrastructure Loans II Fund, managed by Scor Global Investments (a Swiss re-insurance giant), subscribed the whole 35 million euros issue of floating project finance bonds listed on ExtraMot Pro market starting from December 1st. It is a senior amortizing bond, pays a 6 months euribor plus 225 bps coupon and matures in December 2029. Both the mandated lead arrangers and Scor have been advised by Ashurst law firm for the deal.
The Admission Document of the project bond explains that “the net proceeds of the Notes will be used by the Issuer (i) to make equity injections in the SPVs in the form of payments on account of capital (versamenti in conto capitale); (ii) to advance non-convertible quotaholder loans to the SPVs; (iii) to pay the transaction costs related to the Project; (iv) to pay the imposta sostitutiva in relation to the Notes and (v) for additional general corporate purposes, in each case as provided under the Funds Flow Statement. Each SPV will use the proceeds of the Notes advanced by the Issuer to it by way of equity injections and quotaholder loans to reimburse in full the respective existing financial indebtedness, break costs, penalties and associated hedging liabilities”.
This refinancing initiative will result in a 76% increase to Etrion’s expected annual Italian cash distributions, from the 2014 run rate of approximately 4.5 million euros per year to an average annual distribution of approximately 7.9 millions per year. The Italian refinancing will contribute approximately 3.1 millions per year of this total as a result of a number of improved financing terms and conditions, including: reduction of the all-in interest rate paid under the old project finance terms from approximately 7.0% to about half under the new financing, elimination of the previous cash sweep provisions, extension of the final maturity, simplification of the loan administration by consolidating four previous project finance loans into one portfolio financing.
The whole deal is similiar to the one structured last year by Antin Solar, which consisted in both a project bond issue (subscribed by Scor Global Investment and three Aviva Group’s subsidiaries) and a project finance loan issued by a pool of banks led by Natixis. Ashurst law firm was the legal advisor of the deal back then too (see here a previous post by BeBeez and a press release).
