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TerraForm Power Inc (NASDAQ:TERP)
Q3 2020 Earnings Call
Nov 16, 2020, 9:00 a.m. ET


  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Good day, ladies and gentlemen, and welcome to the TerraForm Power Operating, LLC, 2020 Third Quarter of 2020 Results Webcast and Conference Call. [Operator Instructions]

I would now like to turn the conference over to Michael Tebbutt, Chief Financial Officer. You may begin.

Michael Tebbutt -- Chief Financial Officer

Thank you, operator. Good morning, everyone, and thank you for joining us for our 2020 third quarter results conference call and webcast for TerraForm Power Operating, LLC. Before we begin, I'd like to remind you that a copy of our quarter three 2020 financial report can be found under Quarterly Reports on the Financial and SEC Filings page on our website at terraformpower.com.

Note also that we may make forward-looking statements on this call. These forward-looking statements are subject to known and unknown risks and our actual results may differ materially. In addition, we will refer to non-GAAP financial measures. For more information on a reconciliation of these non-GAAP measures to comparable GAAP measures, please refer to our quarter three 2020 financial report under Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations.

Turning to operations, our business performed well in the quarter, supported by strong asset availability and contributions from recent acquisitions and we advanced key strategic priorities, including our merger with Brookfield Renewable and maintaining a robust balance sheet and access to capital. From a financial perspective, in the third quarter of 2020, TerraForm Power delivered adjusted EBITDA of $238 million. This represents an increase in adjusted EBITDA of $45 million compared to the third quarter of 2019. Performance in the quarter was positively impacted by contributions from our acquisitions of utility scale solar assets in Spain and distributed generation solar assets in the United States which took place in late 2019 and early 2020, as well as cost savings, including performance guarantees, and the implementation of our long-term service agreements with our O&M providers. These contributions were partially offset by lower generation levels in North America Solar.

As we mentioned in our last earnings call, we signed all long-term service agreements with SMA Solar Technology for this substantial majority of our North American Solar fleet. On October 01, we completed the transition of all of the underlying projects to SMA, which corresponds to close to 1,000 megawatts. We are also making good progress on the repowering of our 160 megawatt Cohocton and Steel Winds facilities in New York, underpinned by a 12-year power purchase agreement with Verizon and expect to finalize all material project and financing agreements in the fourth quarter and to commence construction in the first half of 2021.

Turning to our debt and liquidity, at the end of the third quarter, we had $569 million of corporate liquidity, which is ample liquidity to fund our capital requirements. Overall, 91% of our total debt is fixed rate or swap debt and we continue to have a very manageable corporate debt stack with no corporate maturities until 2023. In the quarter, we financed a 250-megawatt portfolio of distributed generation assets in the United States, investment grade private place market. The 23-year, $296 million issuance priced at a low fixed-rate coupon of 3.38%. Net proceeds from this non-recourse project level financing were used to make a partial pay-down of our Bridge Financing facility associated with the 2019 AltaGas DG portfolio acquisition. We expect to repay the remaining amount outstanding under the Bridge Financing prior to year end with proceeds from another well-advanced, non-recourse financing. In addition, this was our inaugural green-labeled financing issued in accordance with our 2020 Green Finance framework, which describes the approach of the Company with regards to issuing green debt instruments in various formats to finance or refinance investments in renewable energy. For more information, our Green Finance Framework can be found at terraformpower.com under ESG Highlights.

Subsequent to quarter end, we completed the sale of a minority interest share in an 852-megawatt portfolio of four wind projects located in the United States by selling a 40% interest for $264 million net of working capital adjustments alongside a non-controlling owner, who sold it's 9.9% interest. We used the proceeds of the sale for general corporate purposes, including the repayment of corporate debt and further bolster our available liquidity.

That concludes our remarks for today. If you have any questions, please don't hesitate to contact our Investor Relations team at enquiries@brookfieldrenewable.com. Thank you for joining us today.


[Operator Closing Remarks]

Questions and Answers:

Duration: 6 minutes

Call participants:

Michael Tebbutt -- Chief Financial Officer

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