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Broken Bow Wind Llc Case Summary

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SFS Energy Finance Americas (“SFS EF AM”) requests approval to commit $45 million to Broken Bow Wind LLC’s (“Broken Bow” or the “Borrower”) 15 -year Senior Secured Term Loan (the “Term Loan”) of $64 million. The proceeds from the Term Loan will be used to recapitalize the Borrower, including the refinancing of the existing Term Loan. The proposed transaction will increase the existing Term Loan to $64.0 million from the currently outstanding amount of about $46 million. The remainder of the proceeds will be used to distribute dividends to the equity investors and pay for the transaction fee. SFS EF AM did not participate in the original financing. The Project Sponsor is NRG Energy, Inc. (“NRG” or the “Sponsor”) (Ba3/BB-; SFS Equivalent rating…show more content…
The OMA renews automatically for a term of one year or until terminated by either party based on predefined termination rights. Currently, The WTGs are maintained by GE, the turbine manufacturer, under a five-year Turbine Maintenance Agreement (the “TMA”) ending in April 2017. The energy output forecast is based on the updated wind resource assessment and incorporates the actual wind resource data from the Project site. The historical average energy output was moderately higher than the new energy P-50 energy output forecast.

The IE has opined that the project has performed well since the Commercial Operating Date (“COD”). The average annual energy output through 2015 was about 310.8 GWhs with the plant availability factor of 98.7% and the capacity utilization of about 43.8%. The P50 exceedance level output under the new wind study is about 298 GWhs and a capacity factor of about 42.5%. The analyst notes that the historical operating performance was moderately stronger than the forecast and reflects a robust wind regime, equipment quality, and the strength of operating and maintenance regime.
The output from the Project is sold to NPPD (A+/A1/A+; SFS Equivalent of 3+). The PPAs will end in 2032. The PPA is extendable by 5 years at the option of the
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The IE has opined that the Project should perform at the current level if the good maintenance and the operating practices are followed. GE maintains the WTGs under the TMA. The agreement will end in November 2017 if not renewed. GE charges $27,000/turbine (increasing by 2% annually after year 1). The replaced parts are guaranteed for one year from the date of replacement. The targeted availability factor is 97%. RENOM maintains and operates the balance of the plant under the operating and maintenance agreement (the “OMA”) amended and restated on February 13, 2012. The OMA is for an initial period of five years and will renew automatically for one year on the expiry of the original agreement in 2017. RENOM charges a fixed price of $349,000 or $6,980/turbine for the BOP maintenance. The IE has opined that these costs are in line with the industry averages. The risk is assessed as “Neutral/Standard”. Historically, the availability factor has been strong – 98.7%. The IE has opined that the availability factor will remain over 98% at least through 2017 and beyond if the Borrower follows good operating and maintenance practices. The GE TMA is ending in 2017. There have been no major component failures needing complete replacements at the Project to
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