Amber Infrastructure (‘Amber’) as Investment Adviser to International Public Partnerships Limited (‘INPP’ or the ‘Company’), is pleased to announce that it has successfully completed an innovative refinancing and restructuring on behalf of INPP’s offshore transmission ('OFTO') portfolio.
The transaction sees INPP repay the original bank debt secured against the original three OFTOs it invested into - being the Barrow, Gunfleet Sands and Robin Rigg OFTOs and takes advantage of current favourable conditions in the debt markets. The result is a further de-risking of the portfolio, reducing financial leverage on these investments by c.50% (compared to the level at financial close). This has been achieved through a combination of a new long-term bank debt and the addition of a c.£70m senior debt investment.
The combination of the low cost of the new bank debt, together with the ability to release certain reserves and achieve other efficiencies following the repayment of the existing bank debt, allows the new senior debt investment made by INPP to be attractively priced and generate returns accretive to INPP’s portfolio. At the same time, the transaction provides INPP with additional financial and operational flexibility notably by retaining the ability to re-gear in the future.
The commercial terms of the new bank debt are significantly more attractive than the terms of the original loans as a consequence of favourable current market conditions, the debt market's familiarity with the sector and the strong historic performance of INPP’s OFTO portfolio.
The Barrow, Gunfleet Sands and Robin Rigg OFTOs were the first three of any OFTOs to be invested into and were the result of Amber’s early anticipation of the development of this attractive sub-class of infrastructure. The terms of the third-party debt originally secured against these first three OFTOs reflected the then immaturity of the asset class. Performance of the assets has been strong since their original acquisition, with availability levels significantly in excess of Ofgem's target.
In total, Amber has secured investments for INPP into seven of the seventeen UK OFTOs which have reached financial close. INPP’s OFTO portfolio connects 1.5GW of renewable energy to the UK's grid, which is sufficient to power 1.3 million UK homes. In August, Amber, as Investment Adviser to INPP, was successful in securing preferred bidder status for Rampion OFTO, which will be the eighth OFTO in the portfolio once it reaches financial close.
Further details on the transaction can be found on INPP’s website here.
For further information:
Amber Fund Management Limited
Erica Sibree / Amy Joslin
+44 (0)20 7939 0558 / 0587