Summary
NextEra Energy, Inc. (NEE) announced on June 27, 2013, that its indirect wholly-owned subsidiary, North Sky River Energy, LLC, secured approximately $254 million in limited-recourse senior secured debt. This debt matures in June 2031 and carries a variable interest rate based on LIBOR plus a specified margin. The proceeds from this loan will primarily reimburse NEER for capital contributions towards the development of the North Sky River project, a 162-megawatt wind generating facility in California. To mitigate interest rate risk, North Sky River has entered into interest rate swaps to hedge substantially all variable interest payments. The loan is secured by the assets of the wind facility and North Sky River itself. This financing represents a significant step in the development of a key renewable energy project and provides insight into the company's capital structure and debt management strategies for its growing renewable portfolio.
Key Highlights
- 1NextEra Energy's subsidiary, North Sky River Energy, LLC, obtained a $254 million senior secured term loan.
- 2The loan matures in June 2031, indicating long-term project financing.
- 3Proceeds will fund the development of the North Sky River wind project (162 MW) in California.
- 4The loan is variable rate (LIBOR + margin) with interest payable quarterly and principal semi-annually.
- 5Interest rate swaps have been executed to hedge against interest rate fluctuations.
- 6The loan is limited-recourse and secured by the project's assets and the subsidiary's ownership interest.