Atlantic Power Corporation announced that APLP Holdings Limited Partnership, a wholly-owned subsidiary of thecompany, has entered into new senior secured credit facilities, comprising $700 million in aggregate principal amount of senior secured term loan facilities (the "New Term Loan") and $200 million in aggregate principal amount of senior secured revolving credit facilities (the "New Revolver").  Collectively, the New Term Loan and the New Revolver comprise the "New Credit Facilities".  The Company previously announced the launch of the syndication of the New Credit Facilities in the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on March 21, 2016, and the press release referred to therein. The report indicates the Goldman Sachs Lending Partners is an arranger of the facility. 

"We are pleased to have closed this financing transaction despite a difficult market environment, particularly for companies in the energy sector," said James J. Moore, Jr., President and Chief Executive Officer of the Company.  "Following the planned redemption of our 2017 convertible debentures, we will have no corporate debt maturities prior to 2019.  Continued delevering of our balance sheet is an important priority for us and will be achieved through amortization and discretionary debt repurchases. Although our cash flow allocation will be focused on additional debt reduction, we now have adequate financial flexibility to invest in some capital-light growth opportunities and to continue making discretionary investments in our power plants."

Below is a summary of the terms of the financing.  Additional details are included in the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on April 13, 2016.

The maturity dates of the New Revolver and the New Term Loan are April 2021 and April 2023, respectively. Proceeds from the New Term Loan reflect an original issue discount of 3%. The interest rate on the New Term Loan is the Adjusted Eurodollar Rate (as defined in the credit agreement governing the New Credit Facilities) plus a margin of 5.00%. The New Term Loan contains customary prepayment provisions, including a mandatory 1% annual amortization and mandatory prepayment via the greater of a 50% cash sweep or such other amount that is required to achieve a specified targeted debt balance.

The Company and its subsidiaries expect to use the proceeds of the New Term Loan to:

• fund the prepayment of the existing senior secured term loan at the Company's Atlantic Power Limited Partnership subsidiary in the amount of $447.9 million, plus accrued interest;
• fund the optional prepayment or redemption, at a price equal to par plus accrued interest, of the Company's outstanding Cdn$67.2 million 6.25% Convertible Unsecured Subordinated Debentures, Series A, maturing in March 2017, and the Company's outstanding Cdn$75.8 million 5.60% Convertible Unsecured Subordinated Debentures, Series B, maturing in June 2017 (total US$ equivalent $110.1 million as of March 31, 2016);
• pay transaction costs and expenses; and
• make a distribution to the Company from remaining proceeds of approximately $106 million, which the Company may use for any corporate purpose, including, at the discretion of the Company, repurchase of convertible debentures maturing in 2019 and repurchase of preferred and common equity.

Atlantic Power owns and operates a diverse fleet of power generation assets in the United States and Canada.  The Company's power generation projects sell electricity to utilities and other large commercial customers largely under long-term power purchase agreements, which seek to minimize exposure to changes in commodity prices.