Palisade Investment Partners has secured refinancing for its Hallett I Wind Farm in South Australia. National Australia Bank has underwritten the A$160 million ($115 million; €102 million), 13.75-year facility, which is to be syndicated to investors in the Japanese life insurance market.
The Sydney-headquartered fund manager announced that it had secured the facility on “highly attractive pricing and terms”. It said that this reflected Hallett’s strong credit position and Palisade’s strength as a long-term sponsor. No further terms of the deal have been disclosed.
This is the second time in recent months that Palisade has looked to Japanese institutions to secure a debt refinancing package for one of its wind farms.
In December 2018, the fund manager agreed a A$140 million, 11.5-year loan underwritten by Japanese bank MUFG for its Waterloo Wind Farm in South Australia. That loan was also syndicated to the Japanese lending and insurance market, with Palisade stating at the time that MUFG would retain a “significant stake”.
Palisade owns 100 percent of Hallett I on behalf of its investors, with 49 percent held by the open-ended Palisade Renewable Energy Fund (PREF).
The wind farm has a capacity of 94.5MW. It also has a 25-year offtake agreement in place until 2033 with Australian energy retailer AGL, with an option to renew. The asset has been operational since 2008.
Palisade CEO Roger Lloyd said in a statement: “Hallett now has a permanent financing solution that removes future refinance risk from the business. Combined with its fixed cashflow profile under the AGL offtake structure, Hallett’s investors have clear visibility over their long-term investment returns.”
On the terms that Palisade had been able to achieve with the refinancing, Lloyd added: “We are continuing to observe attractive long-term debt pricing due to strong liquidity in long-dated financing structures and historically low long-term base rates.”
Investors have achieved favourable terms on other recent Australian refinancing deals. Oversubscription on Plenary Group’s refinancing of the Peninsula Link public-private partnership in Victoria tempted four Australian banks in October 2018 to go beyond their preferred five-year terms and participate in a 10-year debt tranche.
PREF now has more than A$300 million in funds under management and commitments, including a A$75 million cornerstone commitment from the Clean Energy Finance Corporation. The fund also holds stakes in Ross River Solar Farm in Queensland and the under-construction Granville Harbour Wind Farm in Tasmania.
According to Palisade, PREF generated a total return between its inception and 31 March 2019 of 15.2 percent per year, including a cash yield of 7.3 percent annually.