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SEC Filings
10-K
TERRAFORM POWER, INC. filed this Form 10-K on 03/07/2018
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Covenants and Cross-defaults    

The terms of the Company's corporate-level debt agreements and indentures include customary affirmative and negative covenants and provide for customary events of default, which include, among others, nonpayment of principal or interest and failure to timely deliver financial statements. This includes quarterly financial maintenance covenants for the New Revolver. The occurrence of an event of default for one corporate-level debt instrument could also cause a cross-default for the other respective corporate-level debt instruments as described below.

Pursuant to both the terms of the New Revolver and the New Term Loan, a default of more than $75.0 million of indebtedness (other than non-recourse indebtedness, and indebtedness under the Sponsor Line Agreement, which is an obligation of TerraForm Power), including under these respective agreements, would result in a cross-default under the respective agreements that would permit the lenders holding more than 50% of the aggregate exposure under each to accelerate any outstanding principal amount of loans, terminate any outstanding letter of credit and terminate the outstanding commitments (as applicable to each).
    
Pursuant to the terms of each series of the Senior Notes, a default of indebtedness that exceeds the greater of $100.0 million or 1.5% of the Company’s consolidated total assets (other than non-recourse indebtedness and indebtedness under the Sponsor Line Agreement, which is an obligation of TerraForm Power), that is (i) caused by a failure to pay principal of, or interest or premium, if any, on such indebtedness prior to the expiration of the grace period provided in such indebtedness on the date of such default or (ii) results in the acceleration of such indebtedness would give the trustee under the respective indentures or the holders of at least 25% in the aggregate principal amount of the then outstanding Senior Notes under the respective indentures the right to accelerate any outstanding principal amount of loans and terminate the outstanding commitments under the respective indentures.

An event of default of more than $75.0 million of indebtedness under the New Revolver, New Term Loan and each series of the Senior Notes would trigger an event of default under the Sponsor Line Agreement that would permit the lenders to accelerate any outstanding principal amount of loans and terminate the outstanding commitments under the Sponsor Line Agreement.

Non-recourse Long-term Debt

Indirect subsidiaries of the Company have incurred long-term non-recourse debt obligations with respect to the renewable energy facilities that those subsidiaries own directly or indirectly. The indebtedness of these subsidiaries is typically secured by the renewable energy facility's assets (mainly the renewable energy facility) or equity interests in subsidiaries that directly or indirectly hold renewable energy facilities with no recourse to TerraForm Power, Terra LLC or Terra Operating LLC other than limited or capped contingent support obligations, which in aggregate are not considered to be material to the Company's business and financial condition. In connection with these financings and in the ordinary course of its business, the Company and its subsidiaries observe formalities and operating procedures to maintain each of their separate existence and can readily identify each of their separate assets and liabilities as separate and distinct from each other. As a result, these subsidiaries are legal entities that are separate and distinct from TerraForm Power, Terra LLC, Terra Operating LLC and the guarantors under the New Revolver, the New Senior Notes due 2023, the Senior Notes due 2025, the Senior Notes due 2028, the Sponsor Line Agreement and the New Term Loan.

U.K. Debt Refinancing

On November 6, 2015, the Company entered into definitive agreements to refinance GBP 178.6 million (equivalent of $270.8 million on the closing date) of existing non-recourse indebtedness by entering into a new GBP 313.5 million (equivalent of $475.2 million on the closing date) facility. The new facility was comprised of Tranche A for GBP 87.0 million (equivalent of $131.9 million) which was fully amortizing over the seven-year term, and Tranche B for GBP 226.5 million (equivalent of $343.3 million), which was payable at maturity in 2022. This new facility bore interest at a rate per annum equal to LIBOR plus an applicable margin of 2.10% for Tranche A and 2.35% for Tranche B. The non-recourse facility was secured by all of the Company's solar generation facilities located in the U.K. except for the Norrington facility. The Company recognized a loss on extinguishment of debt of $7.5 million during the year ended December 31, 2015 as a result of this refinancing. As discussed in Note 4. Assets Held for Sale, Terra Operating LLC closed on its sale of the U.K. Portfolio on May 11, 2017 to Vortex Solar UK Limited, which resulted in the reduction of this indebtedness.


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