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SEC Filings

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

Term debt for power plants in India consists of fixed and variable rate loans with interest rates tied to one of the following indexes: (i) the six-month LIBOR; (ii) the two-year Infrastructure Development Finance Company (“IDFC”) benchmark rate; (iii) the PFS reference rate; or (iv) the L&T prime lending rate. India term debt with fixed rates totaled $21.3 million as of December 31, 2015, with rates ranging from 0.0% to 12.0%. India term debt with variable rates totaled $23.8 million as of December 31, 2015, with an interest rate of 12.6%. All loans mature between 2026 and 2029. Principal and interest are due and payable in arrears monthly or quarterly and on the maturity dates of the credit facilities. During the second quarter of 2016, the Company repaid in full the $23.6 million of project level indebtedness of the NSM 24 power plant, which constituted all of the variable rate India term debt that was outstanding as of December 31, 2015. Prior to this repayment, the Company was in default on this project level indebtedness, however a waiver had been obtained through December 31, 2016.
As of December 31, 2015, the Azure and ESP Urja power plants, which have term debt financed with a U.S. dollar-denominated term loan from OPIC, had a combined outstanding principal amount of approximately $19.5 million. The term debt matures in September and December of 2026 and bears fixed interest at a rate of 4.7% and 4.5%, per annum, respectively. Interest and principal amortization payments are made on a quarterly basis. The term loans contain various customary restrictive covenants, including covenants restricting the payment of distributions and requiring maintenance of certain financial ratios. As of December 31, 2015, the Company was not in compliance with certain covenants due to changes in foreign currency valuations, the failure by the Azure and ESP Urja project companies to file audited financial statements and, a delay by local authorities to complete the classification of a portion of the project sites as non-agricultural use. Thus, the debt balances are classified as current as of December 31, 2015. These defaults also prevent the Company from receiving distributions from the Azure and ESP Urja power plants 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.
Term debt totaling $5.9 million for power plants in Malaysia consists of variable rate loans with interest rates tied to the Kuala Lumpur Interbank Offered Rate. The interest rate on Malaysian term debt as of December 31, 2015 was 6.5% and the Malaysian term debt matures in 2028. Principal and interest are due and payable in arrears at the end of each fiscal quarter or on the maturity date of the credit facility. Each of the term debt agreements contains customary representations, covenants and warranties of the respective borrower including limitations on business activities, guarantees, environmental issues, plant maintenance standards and a minimum debt service coverage ratio requirement. In particular these agreements contain financial and other restrictive covenants that limit the Company’s project companies’ ability to make distributions to it or otherwise engage in activities that may be in its long-term best interests. The project level financing agreements generally prohibit distributions from the project entities to the Company unless certain specific conditions are met, including the satisfaction of certain financial ratios.
Each of the term debt agreements contains customary representations, covenants and warranties of the respective borrower including limitations on business activities, guarantees, environmental issues, power plant maintenance standards and a minimum debt service coverage ratio requirement. In particular these agreements contain financial and other restrictive covenants that limit the Company’s power plant subsidiaries’ ability to make distributions to it or otherwise engage in activities that may be in its long-term best interests. The project level financing agreements generally prohibit distributions from the power plant entities to the Company unless certain specific conditions are met, including the satisfaction of certain financial ratios.
Debt Extinguishments
During the year ended December 31, 2015, the Company repaid $475.9 million aggregate principal amount of project level indebtedness related to certain of its power plants. As a result of these project level extinguishments, the Company recognized a loss on extinguishment of debt of $3.7 million, which is included in loss on extinguishment of debt, net for the year ended December 31, 2015.
As discussed above, in December 2015, the Company’s Board approved a $40.0 million open market repurchase program for the Company’s Senior Notes. The repurchase program began in December 2015 and continued through January 2016. As of December 31, 2015, $8.6 million of the Senior Notes were repurchased for $6.8 million, and the Company paid $0.4 million of accrued interest and prepayment fees. As of December 31, 2015, $0.4 million was included in accounts payable on the consolidated balance sheet representing principal and interest due to an investment bank for repurchases completed in December 2015 but settled in January 2016. A gain on extinguishment of $1.4 million was recognized related to these repurchases and is included in loss on extinguishment of debt, net for the year ended December 31, 2015.


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