OPAL Fuels gets $105 million loan to construct natural gas projects

By Wendy Van Sickle

Columbus, Ohio, Aug. 8 – OPAL Fuels Intermediate Holdco 2 LLC, a wholly owned subsidiary of OPAL Fuels Inc., entered into a new senior secured credit facility with Bank of Montreal as the administrative agent on Thursday that provides for an approximately two-year delayed term loan facility of up to $100 million and a debt service reserve facility of up to $5 million, according to an 8-K filing with the Securities and Exchange Commission.

Proceeds of the delayed loan will be used to fund a portion of the construction of the renewable natural gas projects owned, either in full or through a joint venture with a third party.

Borrowings bear interest at adjusted term SOFR plus 350 basis points for the period from closing to the earlier of the date of conversion of the construction loan to a term loan or Sept. 30, 2024 and 375 bps thereafter.

The outstanding principal amount of the delayed loan is subject to quarterly amortization payments starting Sept. 30, 2024 equal to 2.5% of the principal amount of the outstanding term loan balance as of the conversion date, with the balance due at maturity on Aug. 4, 2027.

The borrower must maintain a consolidated debt service coverage ratio of no less than 1.2x.

“The closing of our senior secured debt facility today, combined with the $215.8 million generated from the recent completion of our business combination with ArcLight Clean Transition Corp. II, will facilitate execution of our growth plan,” Adam Comora, co-chief executive officer of OPAL Fuels, said in the release.

Based in White Plains, N.Y., OPAL Fuels is a vertically integrated renewable fuels platform involved in the production and distribution of renewable natural gas for the heavy-duty truck market.

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