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NEW YORK - US Solar Fund PLC (USF) has successfully completed a non-recourse portfolio-level debt refinancing totaling approximately $166 million, the company announced on April 17, 2025. The refinancing includes a $127 million term loan, a $10.5 million revolving loan, and a $28 million letter of credit facility. This strategic financial maneuver is expected to enhance the company’s operational cash dividend coverage and strengthen its balance sheet.
The refinancing replaces existing senior debt facilities that were set to mature between June 2026 and June 2028. The decision to opt for a bank debt solution was made by the Board after a comprehensive review, aiming to optimize outcomes for USF. The new debt structure is designed to provide more flexibility in the capital structure, which may be advantageous in the event of a portfolio sale under favorable conditions.
The $127 million term loan has a five-year legal tenor but is structured to allow repayments over a 22-year amortization profile, providing resilience against interest rate fluctuations. The new facility will replace the term loans for Milford, Euryalus, and Heelstone portfolios. As a result of the refinancing, the company’s gearing, based on the net asset value (NAV) as of December 31, 2024, will see a slight reduction to 40%, with no expected change to the NAV.
The $10.5 million revolving loan will cover operating expenses, replacing the previous $20 million credit facility. Additionally, the $28 million letter of credit facility will support collateral posting and debt service reserve account requirements, releasing cash collateral previously tied up under the Milford Power Purchase Agreement (PPA).
Following the refinancing, USF’s Board has decided to increase the target dividend from $0.0225 per share to $0.035 per share, effective in Q3 2025. This adjustment reflects the improved operational cash dividend coverage anticipated from the lower near-term debt amortization.
Gill Nott, Chair of USF, expressed confidence that the refinancing positions the company for strength moving forward and demonstrates lender support for the portfolio. The Board’s decision was informed by various refinancing options, and despite a challenging market, the successful transaction is attributed to the experience of the investment management team and lender backing.
This financial restructuring is based on a press release statement, aiming to provide shareholders with enhanced value through improved capital structure and increased dividends.
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