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SEC Filings

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

thereafter, 50.0% to all holders of Class A units, Class B1 units and Class B units, pro rata, and 50.0% to the holders of the IDRs.
There were no payments for IDRs made by the Company during the years ended December 31, 2015 and 2014. As of December 31, 2015, there were no Class B1 units of Global LLC outstanding.
Distributions
The Global LLC Operating Agreement restricts distributions to holders of Class B units during the Distribution Forbearance Period and the Subordination Period.
Distribution Forbearance
During the Distribution Forbearance Period, the Global LLC Operating Agreement limits distributions of cash in respect of a specific quarter to Class B units as follows:
the Class B units will not, under any circumstances, be entitled to receive any distributions through the end of 2016 (i.e., distributions declared on or prior to March 31, 2017); and
thereafter, until the end of the Distribution Forbearance Period, the Class B units will not be entitled to receive any distributions to the extent the holders of Class A units and Class B1 units have not received distributions in an amount equal to the Minimum Quarterly Distribution plus any arrearages in the payment of Minimum Quarterly Distributions from prior quarters.
The Distribution Forbearance Period began on the completion of the IPO and ends on the later of March 31, 2017 or the date that the Completed CAFD Amount (as defined in the Global LLC Operating Agreement), which approximates the sum of cash available for distribution to shareholders from contributed construction projects and completed acquisition projects from the Company’s IPO portfolio, exceeds the CAFD Forbearance Threshold (as defined in the Global LLC Operating Agreement), which equals $72.1 million. Any distributions forgone by the holders of Class B units pursuant to the provisions in the Global LLC Operating Agreement relating to the limitations on distributions on the Class B units during the Distribution Forbearance Period will not be distributed to holders of other classes of units and will not constitute an arrearage on the Class B units.
Subordination Period
The Global LLC Operating Agreement provides that, during the Subordination Period, the Class A units and Class B1 units (if any) will have the right to receive quarterly distributions in an amount equal to $0.275 per unit, which amount is defined as the “Minimum Quarterly Distribution,” plus any arrearages in the payment of the Minimum Quarterly Distribution on the Class A units and Class B1 units from prior quarters, before any distributions may be made on the Class B units. The Class B units are deemed “subordinated” because for a period of time, referred to as the “Subordination Period,” the Class B units will not be entitled to receive any distributions from Global LLC until the Class A units and Class B1 units have received the Minimum Quarterly Distribution plus any arrearages in the payment of the Minimum Quarterly Distribution from prior quarters. Furthermore, no arrearages will be paid on the Class B units. The practical effect of the subordinated Class B units is to increase the likelihood that during the Subordination Period there will be sufficient cash available for distributions to shareholders to pay the Minimum Quarterly Distribution on the Class A units and Class B1 units. The subordination of the Class B units is in addition to the provisions in the Global LLC Operating Agreement relating to the limitations on distributions on the Class B units during the Distribution Forbearance Period described above.
The Subordination Period began on the completion of the IPO and continues until each of the following tests regarding distributions of cash available for distribution to shareholders and Minimum Quarterly Distributions are met, which will be a minimum three-year period ending no earlier than the beginning of the period for which a distribution is paid for the first quarter of 2018:
distributions of cash available for distribution to shareholders on each of the outstanding Class A units, Class B units and Class B1 units of Global LLC equaled or exceeded $1.1000 per unit (the annualized Minimum Quarterly Distribution) for each of the three consecutive, non-overlapping, four-quarter periods immediately preceding that date;
the cash available for distribution to shareholders generated during each of the three consecutive, non-overlapping, four-quarter periods immediately preceding that date equaled or exceeded the sum of $1.1000 per unit (the annualized Minimum Quarterly Distribution) on all of the outstanding Class A units, Class B units and Class B1 units of Global LLC during those periods on a fully diluted basis; and
there are no arrearages in payment of the Minimum Quarterly Distribution on the Class A units or Class B1 units of Global LLC.


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