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SEC Filings

10-Q
TERRAFORM GLOBAL, INC. filed this Form 10-Q on 08/09/2017
Entire Document
 

indenture governing the Senior Notes to timely furnish the Company's Form 10-K for the year ended December 31, 2016. No event of default under the indenture governing the Senior Notes occurred due to the filing of the Company’s Form 10-K for the year ended December 31, 2016 before an event of default under the indenture governing the Senior Notes would otherwise arise.
Covenant defaults may occur in the future under the indenture governing the Senior Notes in the event of delays in the filing of the Company’s periodic reports with the SEC. There can be no assurance that the Company will be able to file its periodic reports with the SEC within the periods currently required under the indenture governing the Senior Notes or that holders of the Senior Notes will agree to any required extension of financial statement filing dates on acceptable terms or at all. A default on the Senior Notes would permit the trustee or the holders of at least 25% in aggregate principal amount of notes outstanding to accelerate the Senior Notes. The Company would likely not have sufficient liquidity to meet this obligation, which could have a material adverse effect on its business, results of operations, financial condition and ability to pay dividends.
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 $352.7 million and $351.6 million of project level debt as of June 30, 2017 and December 31, 2016, respectively. The project level debt is secured by the assets of the applicable project companies and certain intermediary holding companies.
As of June 30, 2017 and December 31, 2016, term debt for power plants in South Africa consists of variable rate loans, totaling $317.2 million and $315.2 million, respectively, with interest rates tied to the three-month LIBOR and the three-month Johannesburg Interbank Agreed Rate, as well as fixed rate loans totaling $13.3 million and $12.6 million, respectively. The interest rates on the South Africa term debt ranged from 11.4% to 13.0% as of June 30, 2017 and December 31, 2016, and the debt matures in 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 June 30, 2017 and December 31, 2016, 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 and other lenders, had an outstanding principal amount totaling $143.5 million and $136.6 million, respectively. This term debt matures in 2031. As of June 30, 2017 and December 31, 2016, the Witkop and Soutpan project companies were not in compliance with certain covenants due to the SunEdison Bankruptcy, as well as the expiration of a performance bond posted by a subcontractor under the engineering, procurement and construction contract. Thus, the debt balances are classified as current as of June 30, 2017 and December 31, 2016. These defaults also prevent the Soutpan and Witkop project companies from making distributions and provide the lenders with the right to accelerate the debt maturity. The Company has obtained waivers and/or forbearance agreements from the lenders for varying periods as the Company continues to work to cure such defaults. However, certain defaults were not cured prior to the expiration of the applicable waivers. As a result of these defaults, the lenders are entitled to demand, and have demanded, that the project companies pay default interest of 2.0% effective as of February 1, 2017.
As of June 30, 2017 and December 31, 2016, 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 $173.7 million and $178.5 million, respectively. The term debt matures in September 2031. As of June 30, 2017 and December 31, 2016, the project company was not in compliance with certain covenants due to the SunEdison Bankruptcy, as well as a delay by the contractor, a SunEdison subsidiary, in achieving final completion under the engineering, procurement and construction contract. Thus, the debt balances are classified as current as of June 30, 2017 and December 31, 2016. These defaults also prevent the Boshof project company from making distributions and provide OPIC with the right to accelerate the debt maturity. The Company is currently working with OPIC to cure such defaults.
As of June 30, 2017 and December 31, 2016, term debt for power plants in India consists of fixed rate loans totaling $16.4 million and $17.3 million, respectively, with interest rates ranging from 0.0% to 4.8%, and the debt matures in 2026. Principal and interest are due and payable in arrears monthly or quarterly and on the maturity dates of the credit facilities.
As of June 30, 2017 and December 31, 2016, the Azure and ESP Urja power plants, which have term debt financed with U.S. dollar-denominated term loans from OPIC, had a combined outstanding principal amount of approximately $16.3 million and $17.3 million, respectively. The term debt matures in September and December of 2026, respectively, and bears fixed interest at a rate of 4.5% and 4.8% per annum, respectively. Interest and principal amortization payments are made on a quarterly basis. As of June 30, 2017 and December 31, 2016, the Azure project company was not in compliance with certain financial ratio covenants due to changes in foreign currency valuations. In addition, the Azure and ESP Urja project companies were not in compliance with certain covenants due to the SunEdison Bankruptcy, as well as a delay by local authorities to

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