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SEC Filings

10-K
TERRAFORM GLOBAL, INC. filed this Form 10-K on 12/21/2016
Entire Document
 

K for the year ended December 31, 2015 through December 26, 2016 and, in the case of the indenture governing our Senior Notes, by extending the required filing dates of our Forms 10-Q for the quarter ended March 31, 2016 and for the quarter ended June 30, 2016 through December 26, 2016 and early March 2017, respectively. There can be no assurance that we will be able to file our periodic reports (including our Form 10-K for the year ended December 31, 2016 or Forms 10-Q for the quarters ended March 31, June 30 and September 30, 2016 or any quarters thereafter) with the SEC within the periods currently required under our Revolver and the indenture governing our Senior Notes. The Revolver also contains financial covenants that the Company is required to meet on a quarterly basis, and management projections indicate that the Company could violate the Revolver’s debt service coverage covenant during 2017 which, if the Revolver is not amended or terminated, could cause a default under the Revolver and, depending on the outstanding amount under the Revolver at the time of such default, a cross-default on the Senior Notes.
    
There can be no assurance that our lenders will agree to further extensions of financial statement filing dates or amendments to relevant covenants on acceptable terms or at all. As of December 20, 2016, the Revolver is undrawn, and in the event we are not able to cure or secure a waiver for a default under the Revolver, the Company’s available liquidity is sufficient to allow for the Revolver to be terminated, which would also avoid a cross-default on the Senior Notes. However, in the event of a default on the Senior Notes, the Company would likely not have sufficient liquidity to meet this obligation, which could have a material adverse effect on our business, results of operations, financial condition and ability to pay dividends. A default under the indenture governing our Senior Notes would also result in a cross-default under the Revolver that would permit the lenders holding more than 50% of the aggregate exposure under the Revolver to accelerate any outstanding principal amount of loans, terminate any outstanding letter of credit and terminate the outstanding commitments under our Revolver.

Project Level Long-Term Debt
The Company typically finances power plants through entity specific debt secured by the power plant’s assets and equity interests with no recourse to the Company. These financing agreements typically provide for a credit facility used for construction, which upon completion is converted into term debt. The Company had $368.9 million and $374.1 million of project level debt for the years ended December 31, 2015 and 2014, respectively. The project level debt is secured by the assets of the applicable project companies and certain intermediary holding companies.
Term debt for power plants in South Africa consists of variable rate loans, totaling $306.9 million, with interest rates tied to the three-month LIBOR and the three-month Johannesburg Interbank Agreed Rate, as well as fixed rate loans totaling $9.7 million. The interest rates on the South Africa term debt as of December 31, 2015 range from 12.29% to 13.03% and the debt matures between 2024 and 2031. Principal and interest are due and payable in arrears at the end of each fiscal quarter or semi-annually and on the maturity date of the credit facilities.
As of December 31, 2015, the Witkop and Soutpan power plants, which have term debt financed with a South African Rand (ZAR)-denominated term loan from The Standard Bank of South Africa Limited, had an outstanding principal amount totaling $122.1 million. This term debt matures in 2031. The term loans contain various customary restrictive covenants, including covenants restricting the payment of distributions and requiring compliance with various transaction documents, including the EPC contract. As of December 31, 2015, the Company was not in compliance with certain covenants due to the failure by the Witkop and Soutpan project companies to file auditors' certificates for certain financial ratios, audited financial statements and semi-annual operating reports. Thus, the debt balances are classified as current as of December 31, 2015. These defaults also prevent the Company from receiving distributions from the Soutpan and Witkop power plants and provide the lenders with the right to accelerate the debt maturity. The company is currently working with the applicable project lenders to obtain waivers and/or forbearance agreements as we seek to cure such defaults; however, no assurances can be given that such waivers and/or forbearance agreements will be obtained.
As of December 31, 2015, the Boshof power plant, which has term debt financed with a U.S. dollar-denominated term loan from the Overseas Private Investment Corporation (“OPIC”), had an outstanding principal amount of approximately $184.6 million.  The term debt matures in September 2031. The term loans contain various customary restrictive covenants, including covenants restricting the payment of distributions and requiring compliance with various transaction documents, including the EPC contract.  The Company was not in compliance with certain covenants due to the failure by the Boshof project company to submit its tax return for the year ended December 31, 2014 by December 31, 2015 and, a delay by the contractor, a SunEdison subsidiary, in achieving final completion under the EPC contract. Thus, the debt balances are classified as current as of December 31, 2015. These defaults also prevent the Company from receiving distributions from the Boshof power plant and provide OPIC with the right to accelerate the debt maturity. The Company is currently working with OPIC to obtain waivers and/or forbearance agreements as we seek to cure such defaults; however, no assurances can be given that such waivers and/or forbearance agreements will be obtained.


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