Atlantic Power begins consent solicitation on 5.95% notes due 2036

By Taylor Fox

New York, Feb. 24 – Atlantic Power Corp. and wholly-owned subsidiary Atlantic Power Ltd. Partnership began a consent solicitation with respect to proposed amendments on its indenture governing the 5.95% medium-term notes due June 23, 2036, according to a news release.

Atlantic Power is seeking consents to the proposed amendments in connection with its transaction involving Atlantic Power, Atlantic Power Ltd. Partnership, Atlantic Power Preferred Equity Ltd. and Tidal Power Holdings Ltd. and Tidal Power Aggregator, LP, each an affiliate of infrastructure funds managed by I Squared Capital Advisors (US) LLC. Pursuant to this transaction, Tidal Power Holdings Ltd. will acquire all of the issued and outstanding common shares in the capital of Atlantic Power for $3.03 in cash per common share and all of the issued and outstanding preferred shares in the capital of Atlantic Power Preferred will be transferred to the company for C$22 in cash per preferred share.

The amendments would result in an amendment to the indenture to include a mandatory redemption obligation on the part of Atlantic Power Ltd., conditional on closing of the transaction, to redeem all of the outstanding notes for consideration equal to 106.071 of the principal amount of notes outstanding, plus interest.

Atlantic Power will pay holders who validly deliver their consents prior to the expiration time a consent fee equal to 0.25% of the principal amount of notes in respect of which a consent has been delivered prior to the expiration time.

The amendments are subject to certain conditions, including the receipt of valid consents of holders of not less than two-thirds of the principal amount of the notes outstanding, as well as the satisfaction or waiver of all the conditions to the completion of the transaction.

If the company receives requisite consents, the company intends to execute a supplemental indenture giving effect to the proposed amendments as close as reasonably practicable prior to the closing of the transaction.

Atlantic Power and Atlantic Power Ltd. have entered into a support agreement with a fund manager representing 66% of the principal amount of notes outstanding pursuant to which the fund manager has agreed to consent to the proposed amendments.

As a result, if other holders of two-thirds of 1% of the outstanding principal amount of notes consent to the proposed amendments, the requisite consent threshold will have been met.

Atlantic Power also announced it will hold a meeting of the noteholders of its 6% series E convertible unsecured subordinated debentures due Jan. 31, 2025 virtually on March 18 at 10 a.m. ET.

At the meeting, holders will be asked to consider and pass an extraordinary resolution authorizing certain amendments to the trust indenture governing the convertible debentures to provide for a mandatory conversion of the convertible debentures immediately prior to the closing of the transaction based on the conversion ratio in effect at such time.

Holders will receive $3.03 per common share held following the conversion of the convertible debentures plus interest.

The deadline for receiving proxy or voting instructions in connection with the debentureholder meeting is 10 a.m. ET March 16.

Atlantic Power is solicitation consents from holders of record as at 5 p.m. ET Jan. 18.

The consent solicitation will expire at 5 p.m. ET March 16.

RBC Dominion Securities Inc. (416 842-6311, 877 381-2099; liability.management@rbccm.com) is the solicitation agent and BNY Trust Co. of Canada is the tabulation agent.

RBC Dominion Securities Inc. and Kingsdale Advisors (866 229-8263, 416 867-2272, 866 545-5580; contactus@kingsdaleadvisors.com) are the joint solicitation agents in connection with the debentureholder meeting.

Dedham, Mass.-based Atlantic Power owns and operates a fleet of power generation assets.

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