SunEdison’s Terraform Buys $250 Million of Solar Farms

TerraForm Power Inc., the company that owns and operates solar farms mainly built by parent SunEdison Inc., will pay $250 million to Capital Dynamics U.S. Solar Energy Fund, L.P. for solar projects in five U.S. states.

TerraForm will buy the 39 projects totaling 77.6 megawatts in California, Massachusetts, New Jersey, New York and Pennsylvania using debt financing through a $275 million increase in an existing term loan, Beltsville, Maryland-based TerraForm said today in a statement.

Sold by Swiss private-asset manager Capital Dynamics AG’s fund, the projects are expected to deliver an “attractive” cash-on-cash return of about 9 percent, TerraForm Chief Executive Officer Carlos Domenech said in the statement.

TerraForm raised $501.6 million in its July initial public offering to become a so-called yieldco. They’re an increasingly common way for renewable-energy developers to raise capital at lower costs by selling projects to their yieldco, using the proceeds to fund additional plants.

Barclays Plc and JPMorgan Chase & Co., both underwriters to the company’s IPO, acted as exclusive financial advisors to TerraForm Power on the transaction that is expected to close in the fourth quarter.

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