TransAlta Renewables Announces Pricing of $260 Million Project Financing of New Brunswick Wind Assets

Sep 27, 2017

CALGARY, Alberta (Sept 27, 2017) – TransAlta Renewables Inc. (“TransAlta Renewables” or the “Company”) (TSX: RNW) today announced that its indirect majority-owned subsidiary, Kent Hills Wind LP (the “Issuer”), priced an approximately $260 million bond offering, by way of a private placement, which will be secured by, among other things, a first ranking charge over all assets of the Issuer (the “Financing”).  The bonds will be amortizing and will bear interest from their date of issue at a rate of 4.454%, payable quarterly and maturing on November 30, 2033.

Net proceeds of the Financing will be used to fund a portion of the construction costs for the 17.25 MW Kent Hills expansion (upon meeting certain completion tests and other specified conditions) and to make advances to Canadian Hydro Developers, Inc. (“CHD”) and to an affiliate of Natural Forces Technologies Inc., the Company’s partner who owns approximately 17% of the Issuer. The proceeds of the advances to CHD will be used to redeem all of CHD’s outstanding Debentures (as defined below).

Closing of the Financing is expected to occur on or around October 2, 2017.

The Issuer’s assets consist of the 96 MW Kent Hills I wind facility, the 54 MW Kent Hills II wind facility and the planned 17.25 MW Kent Hills III expansion located near Moncton, New Brunswick.  Kent Hills I and II began commercial operation in December 2008 and November 2010, respectively. The 17.25 MW expansion is expected to begin commercial operation in October 2018.  Each phase of the wind project is 100% contracted to New Brunswick Power from the date of commercial operation to November 2035 and utilizes proven Vestas turbine technology.

TransAlta Renewables also announced today that CHD will redeem all of its outstanding 5.77% Unsecured Debentures, Series 3, due June 19, 2018 in the aggregate principal amount of $116,000,000 (the “Series 3 Debentures”), 7.027% Unsecured Debentures, Series 4, due June 11, 2018 in the aggregate principal amount of $50,500,000 (the “Series 4 Debentures”) and 7.308% Unsecured Debentures, Series 5, due June 11, 2018 in the principal amount of US$20,000,000 (the “Series 5 Debentures”, and together with the Series 3 Debentures and the Series 4 Debentures, the “Debentures”) on October 12, 2017. The redemption price will be $1,045.99 per $1,000 principal amount of the Series 3 Debentures, $1,057.79 per $1,000 principal amount of the Series 4 Debentures and $1,060.59 per $1,000 principal amount of the Series 5 Debentures, including accrued and unpaid interest on the Debentures to but excluding the redemption date. CHD has delivered notices in respect of the redemption pursuant to the indenture governing the Debentures. Proceeds advanced to CHD by the Issuer from the Financing will be used to partially fund the redemption price of the Debentures.

The securities mentioned herein have not been and will not be registered under the United States Securities Act of 1933, as amended, any state securities laws or the laws of any other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements. The securities mentioned herein have not been and will not be qualified for distribution to the public under applicable Canadian securities laws and, accordingly, any offer and sale of the securities in Canada will be made on a basis which is exempt from the prospectus and dealer registration requirements of such securities laws. The securities will be offered and sold in Canada on a private placement basis only to “accredited investors”. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

 About TransAlta Renewables Inc.

 TransAlta Renewables is among the largest of any publicly traded renewable independent power producers (“IPP”) in Canada. Our asset platform and economic interests are diversified in terms of geography, generation and counterparties and consist of interests in 18 wind facilities, 13 hydroelectric facilities, eight natural gas generation facilities and one natural gas pipeline, representing an ownership interest of 2,441 MW of net generating capacity, located in the provinces of British Columbia, Alberta, Ontario, Québec, New Brunswick, the State of Wyoming and the State of Western Australia. Our objectives are to (i) create stable, consistent returns for investors through the ownership of, and investment in, highly contracted renewable and natural gas power generation and other infrastructure assets that provide stable cash flow primarily through long-term contracts with strong counterparties; (ii) pursue and capitalize on strategic growth opportunities in the renewable and natural gas power generation and other infrastructure sectors; (iii) maintain diversity in terms of geography, generation and counterparties; and (iv) pay out 80 to 85 per cent of cash available for distribution to the shareholders of the Company on an annual basis.

 Cautionary Statement Regarding Forward Looking Information

This news release contains forward looking statements, including statements regarding the business and anticipated financial performance of the Company that are based on the Company’s current expectations, estimates, projections and assumptions in light of its experience and its perception of historical trends. In some cases, forward-looking statements can be identified by terminology such as “plans”, “expects”, “proposed”, “will”, “anticipates”, “develop”, “continue”, and similar expressions suggesting future events or future performance. In particular, this news release contains forward-looking statements, including without limitation, statements pertaining to the size, price and closing of the Financing, the use of the proceeds from the Financing, including the redemption of the Debentures, and the construction and commercial operation of the Kent Hills III expansion. These forward-looking statements are not historical facts but reflect the Company’s current expectations concerning future plans, actions and results. These statements are subject to a number of risks and uncertainties that could cause actual plans, actions and results to differ materially from current expectations including, but not limited to: delays in, or any failure to complete, the Financing; changes in economic and market conditions; and potential delays in the commissioning or construction of the Kent Hills III expansion. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect the Company’s expectations only as of the date of this news release. The purpose of the financial outlooks contained herein is to give the reader information about management’s current expectations and plans and readers are cautioned that such information may not be appropriate for other purposes. The Company disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 Note: All financial figures are in Canadian dollars unless otherwise indicated

For more information:

Investor Inquiries: Media Inquiries:
Sally Taylor Stacey Hatcher
Manager, Investor Relations Manager, Communications
Phone: 1-800-387-3598 in Canada and U.S. Phone: Toll-free media number: 1-855-255-9184
Email: investor_relations@transalta.com Email: ta_media_relations@transalta.com

 

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