SunEdison Yieldco Avoids Event of Default on Notes

  • TerraForm Power extends deadline to file delayed 2015 report
  • Yieldco has until December under agreement with bondholders

TerraForm Power Inc., a public holding company founded and controlled by bankrupt clean-energy giant SunEdison Inc., reached a deal with bondholders to buy more time to file its delayed 2015 annual report.

A unit of the yieldco, TerraForm Power Operating LLC, persuaded subsets of bondholders to extend the deadline to file the 2015 report and its first-quarter report to Dec. 6, according to a statement Tuesday evening.

In May, bondholders slapped Bethesda, Maryland-based TerraForm Power with notices of default for failing to produce the annual report. That left the yieldco with about 90 days to file or extend the deadline -- or face a demand for accelerated payments. 

TerraForm, which owns operating wind and solar farms, has blamed SunEdison for its inability to file. SunEdison, it has said, provides systems needed to complete the reports. In March -- about a month before it filed for bankruptcy protection -- SunEdison attributed its own delayed 2015 report to “deficient information technology controls” from a new reporting system.

In exchange for the extensions, TerraForm increased the interest rate on bonds due in 2023 to 6.375 percent from 5.875 percent. It boosted the rate on its 6.125 percent notes due in 2025 to 6.625 percent, according to a filing Wednesday. There is $950 million outstanding on the 2023 notes, and $300 million on the 2025 notes, according to data compiled by Bloomberg. The rate increases take effect Sept. 6 and are permanent.

TerraForm said it also agreed to offer to repurchase, in cash, 2023 or 2025 notes from each holder for a price equal to 101 percent of the aggregate principal amount if any person becomes a beneficial owner of 33.3 percent to 50 percent of the voting stock in the yieldco.

TerraForm fell about 1 percent to $12.77 at 1:11 p.m. in New York.

SunEdison filed for bankruptcy in April, listing $16.1 billion in liabilities, the biggest Chapter 11 case so far this year. The developer still owns the controlling shares in both TerraForm Power and another yieldco, TerraForm Global Inc., and it’s now seeking to sell the stakes to help pay its debts.

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