Ameresco lifts revolver to $200 million, term loan to $75 million

By Rebecca Melvin

Concord, N.H., March 4 – Ameresco, Inc. entered into its fifth amended and restated bank credit facility with Bank of America NA as administrative agent on March 4, according to an 8-K filed Monday with the Securities and Exchange Commission.

The facility consists of a $200 million revolver and a $75 million term loan. The revolver may be increased by up to an additional $100 million.

The new credit facility matures on March 4, 2025. The original facility was scheduled to expire on June 28, 2024.

There is also a $220 million delayed draw term loan A, which may be drawn up to three times until March 4, 2023 and which matures on Sept. 4, 2023.

The revolving credit facility does not require amortization of principal. The term loan requires quarterly principal payments of about $1.25 million, with the balance due at maturity.

The interest rate for borrowings under the credit facility is SOFR plus a margin of 150 to 275 basis points, depending on Ameresco’s core leverage ratio. A commitment fee of between 25 bps and 40 bps is payable quarterly on the undrawn portion of the revolver, depending on the core leverage ratio.

Immediately following the closing, the interest rate was 2.3%, or six-month SOFR plus the applicable margin.

Under the facility, Ameresco is required to maintain a ratio of total funded debt to EBITDA of less than 4.5 to 1 at March 31, 4.25 to 1 at June 30, 4 to 1 at Sept. 30, 2022 and Dec. 31, 2022 and 3.5 to 1 thereafter, as well as a debt service coverage ratio of at least 1.5 to 1.

The company must also make certain mandatory prepayments from the proceeds of specified types of asset sales, debt issuances and insurance recoveries, subject to reinvestment rights. Mandatory prepayments, if any, are required to be applied first to the delayed draw term loan.

The facility is guaranteed by some of Ameresco’s direct and indirect wholly owned domestic subsidiaries and are secured by a pledge of all of Ameresco’s and the subsidiary guarantors’ assets, other than the equity interests of certain subsidiaries and assets held in non-core subsidiaries.

After closing, there was no borrowing outstanding under the revolver, $75 million outstanding under the term loan and $200 million outstanding under the delayed draw term loan.

Proceeds will be used for general corporate purposes of Ameresco and its subsidiaries, including permitted acquisitions, refinancing debt and working capital including for the turnkey engineering procurement, construction and maintenance agreement with Southern California Edison.

BofA Securities Inc., Fifth Third Securities Inc. and KeyBanc Capital Markets Inc. are the joint lead arrangers and joint bookrunners of the updated credit facility, and Webster Bank NA is co-documentation agent.

Ameresco is a Framingham, Mass.-based provider of energy efficiency, infrastructure upgrades, asset sustainability and renewable energy solutions for businesses and organizations.

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