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Primary Energy Recycling Announces Completion Of Refinancing

OAK BROOK, IL, May 24, 2012 /PRNewswire/ - Primary Energy Recycling Corporation ("Primary Energy Recycling" or the "Company") (TSX: PRI), a clean energy company that generates revenue from capturing and recycling recoverable heat and byproduct fuels from industrial processes, today announced the closing of a US$110 million senior secured credit facility (the "New Credit Facility").

The proceeds of the New Credit Facility have been applied to fully retire the Company's outstanding US$36.4 million term loan, and will be used to fund the previously announced purchase of Atlantic Power Corporation's common membership interests in Primary Energy Recycling Holdings LLC ("PERH").

"The completion of this transaction facilitates the impending closure and funding of the Atlantic Power transaction, provides the Company greater financial flexibility, and lowers our borrowing cost by approximately 180 basis points," said John Prunkl, President and Chief Executive Officer of Primary Energy Recycling. "This series of transactions will increase shareholder ownership and allow us to move forward as an independently managed company."

The New Credit Facility will include three tranches of debt:
  • $25 million 5-year revolver at Libor plus 300 basis points with no Libor floor
  • $50 million 5-year term loan at Libor plus 300 basis points with no Libor floor
  • $35 million 7-year term loan at Libor plus 425 basis points with a 125 basis point Libor floor

The cost of borrowing (including up-front and original issue discount fees, and hedges) for the New Credit Facility is approximately 5.1% based on current Libor. Principal repayment is primarily achieved by periodic 50% cash flow sweeps plus modest quarterly amortization payments.  The revolver will be undrawn at close.

The existing senior debt that will be retired is at Libor plus 450 basis points with a 200 basis point Libor floor, and has a borrowing cost (including original issue discount fees) of approximately 6.9% based on current Libor.

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