August 24, 2020

Source: Sparkspread P&E / Inframation

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A partnership led by Competitive Power Ventures reached financial close on a USD 875m non-recourse debt to fund construction of the 1,250 MW Three Rivers power project in Illinois. 

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The partnership also includes GE Energy Financial Services, Osaka Gas USA, Axium Infrastructure, and Harrison Street, according to a 24 August press release. 

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Whitehall and Co. advised CPV and General Electric in lining up equity investors, a process that has closed concurrently with the debt raise, one industry source said. 

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The debt financing features a seven-year USD 750m mini-perm facility, and USD 125m in ancillary facilities, according to three sources familiar with the situation. 

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A group of 14 banks participated in the transaction. BNP Paribas, Credit Agricole and MUFG led the club deal, which also included CIT, DNB, ING, Mizuho, Israeli insurance company Migdal, National Bank of Canada, Nomura, Morgan Stanley, Prudential, Shin Han Bank and Woori Bank.

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Latham & Watkins served as legal advisor to the sponsors, while Milbank advised the lenders, said a fourth source familiar. 

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A spokeswoman for CPV declined to comment beyond the content of the press release. 

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Officials at the banks and advisors declined comment or did not immediately reply to calls seeking comment. 

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The project is backed by up to 10-year gas netback agreements. 

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The debt financing had been originally launched in March, but subsequently postponed due to the onset of the Covid-19 outbreak. 

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In June, the sponsors relaunched the deal with an initial margin of 350bps over Libor, featuring step-ups of 25bps in the fourth and sixth year. 

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The gas-fired combined-cycle terminal project is expected to start construction imminently in Grundy County, Ill., requiring an estimated USD 1.3bn investment. The facility is scheduled to begin commercial operations in 2023. 

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Construction will be led by Kiewit Power Constructors Co. 

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The project will sell its power into the PJM market, enough to meet the demand of up to 1.25 million homes and businesses serving Northern Illinois, including Chicago.