CPV Generation Holdings, LLC signed an $825 million agreement to refinance debt at two U.S. power plants, a deal that would consolidate their financing and provide for a planned $130 million distribution to CPV Group.
OPC Energy announced the transaction Thursday after the Oct. 27 signing. The agreement would replace separate project-level financing for the Shore and Maryland plants. Proceeds are also intended to support working capital, collateral requirements and transaction expenses. The proposed payment to CPV Group would be made at closing.
The financing has three parts. A $625 million Term Loan B would run for seven years after closing, with no scheduled principal payments. Its rate is SOFR plus 2.5 percentage points, 75 basis points below the earlier 3.25% spread, OPC said. A $125 million letter-of-credit facility and a $75 million revolving credit facility each have five-year terms. The revolver is priced at SOFR plus 2.25%, while the letter-of-credit facility has a fixed issuance rate of 2.25%. The revolver may be used for cash borrowing or letters of credit.
Starting with the March 31, 2027, payment date, the borrower would use a portion of excess cash flow for quarterly debt prepayments. That portion is 50% if net leverage exceeds 3.5x, 25% from 2.5x through 3.5x, and zero below 2.5x. A minimum debt-service coverage ratio of 1.10x applies to each 12-month test period starting that date, with quarterly testing. OPC reported a pro forma coverage ratio of 6.3x as of Sept. 30, before a reorganization required for the financing.
The plants and related assets would serve as collateral, alongside pledged equity interests in CPV Generation Holdings, LLC. The agreement remains subject to closing conditions, so the signing does not establish that the financing has closed.
Shore and Maryland are natural-gas-fired combined-cycle plants in the PJM electricity market, with capacities of 725 megawatts and 745 megawatts, respectively. CPV Group indirectly owns both plants in full, while OPC owns 71% of CPV Group.
OPC expects to release third-quarter results Nov. 10, subject to board approval. Its English-language results call is scheduled for 8 a.m. ET that day.
