Print Page  Close Window

SEC Filings
10-K
TERRAFORM POWER, INC. filed this Form 10-K on 03/15/2019
Entire Document
 

closing date) maturing in 12.5 years. Tranche A bears interest at a rate per annum equals to six-month Euro Interbank Offered Rate (“Euribor”) plus an applicable margin of 1.70% for the first five years and 1.15% thereafter. Tranche B bears a fixed interest rate of 2.84%. The net proceeds of this refinancing arrangement were used to repay a portion of the outstanding credit facilities. Both tranches amortize on a sculpted amortization schedule. The Company entered into interest rate swap agreements with counterparties to economically hedge greater than 90% of the cash flows associated with the debt, paying a fixed rate of 3.78% for the first five years and 1.15% for the following two years. In return, the counterparties agreed to pay the variable interest payments to the lenders.

Non-recourse Debt Defaults

As of December 31, 2018 and December 31, 2017, the Company reclassified $166.4 million and $239.7 million, respectively, of the Company’s non-recourse long-term indebtedness, net of unamortized deferred financing costs, to current in the consolidated balance sheets due to defaults still remaining as of the respective financial statement issuance date, which primarily consists of indebtedness of the Company’s renewable energy facility in Chile. The Company continues to amortize deferred financing costs and debt discounts over the maturities of the respective financing agreements as before the violations, as the Company believes there is a reasonable likelihood that it will be able to successfully negotiate a waiver with the lenders and/or cure the defaults. The Company based this conclusion on (i) its past history of obtaining waivers and/or forbearance agreements with lenders, (ii) the nature and existence of active negotiations between the Company and the respective lenders to secure a waiver, (iii) the Company’s timely servicing of these debt instruments and (iv) the fact that no non-recourse financing has been accelerated to date and no project-level lender has notified the Company of such lenders election to enforce project security interests.

Refer to Note 2. Summary of Significant Accounting Policies for discussion of corresponding restricted cash reclassifications to current as a result of these defaults.

Financing Lease Obligations

In certain transactions, the Company accounts for the proceeds of sale-leasebacks as financings, which are typically secured by the renewable energy facility asset and its future cash flows from energy sales, with no recourse to Terra LLC or Terra Operating LLC under the terms of the arrangement.

Minimum Lease Payments

The aggregate amounts of minimum lease payments on the Company's financing lease obligations are $77.1 million. Contractual obligations for the years 2019 through 2023 and thereafter, are as follows:
(In thousands)
2019
 
2020
 
2021
 
2022
 
2023
 
Thereafter
 
Total
Minimum lease obligations1
$
5,591

 
$
5,470

 
$
5,664

 
$
7,230

 
$
3,010

 
$
50,101

 
$
77,066

———
(1)
Represents the minimum lease payment due dates for the Company's financing lease obligations and does not reflect the reclassification of $19.9 million of financing lease obligations to current as a result of debt defaults under certain of the Company's non-recourse financing arrangements.

Maturities

The aggregate contractual payments of long-term debt due after December 31, 2018, excluding financing lease obligations and amortization of debt discounts, premiums and deferred financing costs, as stated in the financing agreements, are as follows:
(In thousands)
2019
 
2020
 
2021
 
2022
 
2023
 
Thereafter
 
Total
Maturities of long-term debt1
$
270,889

 
$
243,511

 
$
252,001

 
$
746,872

 
$
1,218,092

 
$
2,994,675

 
$
5,726,040

———
(1)
Represents the contractual principal payment due dates for the Company's long-term debt and does not reflect the reclassification of $166.4 million of long-term debt, net of deferred financing costs of $6.2 million, to current as a result of debt defaults under certain of the Company's non-recourse financing arrangements as of December 31, 2018.



121