18 March 2015

Hallett Hill No 2. Wind Farm becomes the First Australian Wind Farm to successfully Issue in US Private Placement market

Infrastructure Capital Group (ICG) announced today that Hallett Hill No. 2 Wind Farm (Hallett Hill) successfully launched a $A205m issue in the US Private Placement (USPP) market.
The USPP issuance comprises two 12‐year tranches of notes for $US99m and $A76m. The notes will be issued at T+175bps (US tranche) and T+185bps ($A tranche). As part of the transaction, cross currency swaps were entered into to convert the $US notes into $A. The issue was heavily oversubscribed with strong appetite from investors.
Funds from the USPP issuance will be used to refinance Hallett Hill’s current senior debt facility. Funding will occur on 27 May 2015.

The transaction represents a significant milestone for the renewable energy market with Hallett Hill being the first Australian wind farm to issue in the USPP market. Executive Director of ICG and Director of Hallett Hill, Craig Whalen, noted: “The issue demonstrates there is strong appetite from US investors for well‐structured transactions backed by a strong counterparty such as AGL Energy. The 12‐year debt issue provides a long‐term funding solution for Hallett Hill Wind Farm which materially de‐risks our investment. We are delighted with the outcome.” ICG also notes that it significantly reduces EIT’s refinancing requirements for the short term and is an important step in EIT’s ongoing capital management.

Hallett Hill is a 71MW, 34 turbine, wind farm located in mid‐north South Australia near the township of Mt Bryan. Hallett Hill has been operational since 2009. Hallett Hill is wholly owned by the Energy Infrastructure Trust (EIT) which is managed by ICG. It is backed by 25‐year Offtake and Asset Management Deeds with AGL Hydro whose obligations are guaranteed by its parent AGL Energy (S&P: BBB (stable)).

ICG acted as financial and ratings advisor to Hallett Hill. BNP Paribas and National Australia Bank Limited were the Joint Placement Agents. Allens and Sidley Austin provided legal advice to the issuer, Herbert Smith Freehills and Chapman & Cutler provided legal advice to the noteholders and Chatham Financial provided hedging advice to the issuer.

The USPP issue for Hallett Hill follows the successful refinancing of Wattle Point Wind Farm (which is also wholly owned by EIT) in November 2014 by ICG which also included a long term tranche provided by US investors.