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Drax refinances revolving credit facility
19th Nov 2020 09:35
(Sharecast News) - Drax has completed the refinancing of its revolving credit facility, it announced on Thursday, reporting that the new £300m matures in 2025, with an option to extend by one year.
The FTSE 250 company said the facility replaced the current one, which matures in 2021 and provided increased liquidity, enabling the full facility to be drawn as cash.
It said the facility was currently undrawn for cash.
The facility has a customary margin grid referenced over LIBOR, which reflects a small reduction in cost versus the current revolving credit facility, and included an embedded environment, social and governance (ESG) component, which would adjust the margin based on Drax's carbon intensity, measured against an annual benchmark.
Drax said it also agreed a change to the group's £35m term-loan facility, maturing in 2022, in order to simplify its capital structure.
This facility would now rank as senior, previously super senior.
"On 14 September, Drax confirmed that it had agreed a new infrastructure term-loan agreement that provided committed facilities of approximately £160m with a range of maturities between 2024 and 2030," the board said in its statement.
"These facilities extended the Group's maturity profile while also reducing the cost of debt. Drax has now drawn £28m, with the balance to be drawn by February 2021."
The agreement also included an option for a further £75m.
Under that option, Drax said it had agreed £53m maturing in 2028, which would be drawn in December.
Drax also said that on 4 November, it issued €250[m of euro-denominated senior secured notes which mature in 2025.
The effective sterling-equivalent interest rate was 3.24% per annum.
It said the proceeds from that issuance, along with existing cash flows, were being used to redeem its £350m 2022 sterling bond, and £125m ESG term-loan facility.
"The notes extend the group's debt maturity profile and reduce the overall cost of debt to approximately 3.7%."
At 0923 GMT, shares in Drax Group were up 0.84% at 334.8p.
The FTSE 250 company said the facility replaced the current one, which matures in 2021 and provided increased liquidity, enabling the full facility to be drawn as cash.
It said the facility was currently undrawn for cash.
The facility has a customary margin grid referenced over LIBOR, which reflects a small reduction in cost versus the current revolving credit facility, and included an embedded environment, social and governance (ESG) component, which would adjust the margin based on Drax's carbon intensity, measured against an annual benchmark.
Drax said it also agreed a change to the group's £35m term-loan facility, maturing in 2022, in order to simplify its capital structure.
This facility would now rank as senior, previously super senior.
"On 14 September, Drax confirmed that it had agreed a new infrastructure term-loan agreement that provided committed facilities of approximately £160m with a range of maturities between 2024 and 2030," the board said in its statement.
"These facilities extended the Group's maturity profile while also reducing the cost of debt. Drax has now drawn £28m, with the balance to be drawn by February 2021."
The agreement also included an option for a further £75m.
Under that option, Drax said it had agreed £53m maturing in 2028, which would be drawn in December.
Drax also said that on 4 November, it issued €250[m of euro-denominated senior secured notes which mature in 2025.
The effective sterling-equivalent interest rate was 3.24% per annum.
It said the proceeds from that issuance, along with existing cash flows, were being used to redeem its £350m 2022 sterling bond, and £125m ESG term-loan facility.
"The notes extend the group's debt maturity profile and reduce the overall cost of debt to approximately 3.7%."
At 0923 GMT, shares in Drax Group were up 0.84% at 334.8p.