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Ormat Technologies subsidiary issues $151.74 million of senior notes
By Lisa Kerner
Charlotte, N.C., Oct. 31 - Ormat Technologies, Inc. announced that its subsidiary OFC 2 LLC issued $151,739,500.00 of 4.687% series A notes due Dec. 31, 2032 under a Sept. 23 $350 million 20-year note purchase agreement with John Hancock Life Insurance Co. (USA) as administrative agent.
Proceeds will be used for the construction of Ormat's Tuscarora and McGinness Hills geothermal power plants in Nevada, according to a company news release.
As previously reported, OFC 2, ORNI 15 LLC, ORNI 39 LLC, ORNI 42 LLC and HSS II, LLC will issue notes in six series in two tranches associated with the phased construction of the power facilities.
The phase 1 tranche will total up to $180 million and will be comprised of up to $155 million of series A notes and up to $25 million of series B notes.
The phase 2 tranche will total up to $170 million and will be comprised of one or more of series C notes, series D notes, series E notes and series F notes.
The issues will determine if phase 2 construction will take place.
Payment of 80% of the principal and interest on the notes is guaranteed by the Department of Energy's Loan Programs Office under Section 1705 of Title XVII of the Energy Policy Act of 2005 of the department's Loan Guarantee Program.
Each series of notes will bear interest at a rate calculated based on a spread over the Treasury yield curve that will be set at least 10 business days prior to the issuance of the notes.
Interest will be payable quarterly.
Subject to approval from the Energy Department, the interest rate on the series A notes has been set at 4.687% if the notes are issued prior to Oct. 31.
The note purchase agreement contains customary affirmative and negative covenants including maintenance of the issuers' geothermal business and restrictive covenants that limit the issuers' ability to incur other debt and pay dividends.
Reno, Nev.-based Ormat Technologies is a geothermal and recovered energy power business.
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