SFS EF AM Base Case Study: Opco Term Loan

In November 2012, SFS EF AM committed $10 million to the Borrower’s $25 million, senior, secured term loan (the “Term Loan”). The 17-year Term Loan will fully amortize by 2030 with a 3-year PPA tail. The SFS EF AM’s share of the Term Loan balance, at the end of February 2016, was about $9.02 million. SFS EF AM did not participate in the Operating Company’s senior secured operating company loan (the “OpCo Term Loan”). The Term Loan is subordinated to the OpCo Term Loan. The OpCo Term Loan is a 10-year $129.1 million institutional note. The operating performance, since the last rating review (completed on March 18, 2015), was adversely affected by the low wind speed. The actual wind speed factor in 2015 was lower than the wind speed noted in …show more content…
The total energy output in 2015 was 292.5 GWhs, about 16.4% lower than the SFS EF AM Base Case forecast of 350 GWhs. The 2015 plant availability factor was strong, 98.2%. The SFS EF AM Base Case availability factor was 94.2%. Since the commercially operating date (“COD”), the project availability factor has been higher than the SFS EF AM Base Case forecast. Decline in the energy output lowered 2015 revenues by about 16% over the SFS EF AM Base Case. The 2015 maintenance expenses were slightly higher than the SFS EF AM forecast (~4.1%), due to the higher WTGs and the balance-of-plant maintenance related costs. The 2015 increase in the maintenance costs was offset by the lower insurance premiums, land lease costs, and the property taxes. The net change was about a 3% positive variance over the SFS EF AM Base Case operating costs. Total revenues for 2015 were about $20.1 million and the total O&M costs were $5.2 million. The 2015 net operating revenues were down by about 20% over the SFS EF AM Base Case forecast. At the end of 2015, the Project’s risk profile was raised to yellow by the SFS Portfolio Management due to the ongoing problem with the WTG