TransAlta completes OCP LP Bond Offering
On July 20, 2018, TransAlta Corporation (“TransAlta”) completed a C$345 million secured bond offering, by way of a private placement for its newly formed limited partnership, TransAlta OCP LP (the “Issuer”), which was secured by, among other things, a first ranking charge over all but a nominal percentage of the equity interests in the Issuer and its general partner, and a first ranking charge over all of the Issuer’s accounts and certain other assets (the “Financing”). Bondholders also have the benefit of an indirect priority claim over roughly 95% of each annual off-coal payment required to be made by the Government of Alberta (the “Province”) pursuant to an Off-Coal Agreement dated November 24, 2016 (the “Off-Coal Agreement”), which was entered into in connection with the cessation of coal-fired emissions in Alberta, between the Province and TransAlta, TransAlta Generation Partnership (“TGP”), TransAlta Cogeneration, L.P. (“TCLP”) and Keephills 3 Limited Partnership (“K3LP” and, together with TransAlta, TGP and TCLP, the “TAC Entities”).
The bonds are amortizing and bear interest from their date of issue at a rate of 4.509% per annum, payable semi-annually and maturing on August 5, 2030. The bonds have a preliminary rating of BBB, with a Stable trend, by DBRS.
McCarthy Tétrault LLP advised the agent and bondholders in with a team led by Gordon Baird and comprised of Scott Bergen, Shauvik Shah (Business), Stefanie Morand (Tax), and Jamey Gage (Bankruptcy & Restructuring).
