Ontario Power Generation (OPG) said Sept. 23 that it has reached financial close of a C$200m private placement bond offering to fund the redevelopment and expansion of four hydroelectric stations on the lower Mattagami River in northeastern Ontario.
The bonds were issued by Lower Mattagami Energy LP (LMELP), a limited partnership between OPG, as the sole general partner, and LM Energy, a wholly-owned subsidiary of OPG. This is C$200m worth of private placement issue senior secured bonds at a fixed 4.944% annual interest rate due Sept. 21, 2043.
This is the fifth of several private placement issues of senior secured bonds to be used to refinance commercial paper or other indebtedness, which collectively will complete the forecasted C$1.9bn debt financing required for the project.
The redevelopment and expansion of four hydroelectric stations will utilize available water more efficiently, and increase production of clean electricity, OPG noted. One additional generating unit will be added to each of three existing stations at Little Long, Harmon and Kipling. The fourth station, Smoky Falls, will be decommissioned and replaced by a new, three-unit, 267-MW station. The expanded Lower Mattagami River Complex will have a total capacity of 924 MW, an increase of 438 MW.
Construction on the project began in June 2010 and continues to progress well towards completion in 2015, OPG noted.
The bonds received a long-term credit rating of ‘A’ (high) by Dominion Bond Rating Service, and ‘A2’ by Moody’s. The redevelopment and expansion is supported by a long-term Hydroelectric Energy Supply Agreement with the Ontario Power Authority.
The entities that form the Lower Mattagami River Complex are currently wholly-owned (directly or indirectly) by OPG. The Moose Cree First Nation has an option to acquire up to 25% of the entity that will own the expansion assets, which are the additional units at each of the three existing stations and the new Smoky Falls station.