TransAlta Renewables announces pricing of $442 million project financing of three Ontario wind energy assets

TransAlta Renewables Inc. (TransAlta Renewables) (TSX:RNW) today announced that on September 24, 2015 it priced a $442 million bond offering for its indirect wholly-owned subsidiary, Melancthon Wolfe Wind LP (the “Issuer”), which will be secured by a first ranking charge over all assets of the Issuer. The bonds are amortizing and bear interest from their date of issue at a rate of 3.834%, payable semi-annually and mature on December 31, 2028. The bonds have a preliminary rating of BBB, with a Stable trend, by DBRS.(i)

“This financing is in line with our strategy to optimize the capital structure and match duration of debt with the asset life and cash flows,” said Brett Gellner, TransAlta Renewables CEO.

Net proceeds of the financing will be used to, among other things, make advances to Canadian Hydro Developers, Inc. on a subordinated basis pursuant to an intercompany loan agreement, the proceeds of which will be used to finance certain facilities of the Issuer’s affiliates and for other general business purposes.

Closing of the financing is expected to occur on October 1, 2015. Scotia Capital Inc. acted as sole lead agent and bookrunner for this financing.

The wind project consists of three facilities, Melancthon I, Melancthon II and Wolfe Island, all located in the Province of Ontario. The 199.5 MW Melancthon I and II facilities are located near Shelburne, ON and began commercial operations in March 2006 and November 2008, respectively. The 197.8 MW Wolfe Island facility is located near Kingston, ON and began commercial operations in June 2009. The projects are 100% contracted to the IESO for a term of 20 years from commercial operations and utilize proven turbine technology (GE and Siemens).

The securities mentioned herein may be offered and sold in the United States only to qualified institutional buyers in accordance with Rule 144A under the U.S. Securities Act and outside the United States in reliance on Regulation S under the U.S. Securities Act. The securities mentioned herein have not been and will not be registered under the United States Securities Act of 1933, as amended, any state securities laws or the laws of any other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements. The securities mentioned herein have not been and will not be qualified for distribution to the public under applicable Canadian securities laws and, accordingly, any offer and sale of the securities in Canada will be made on a basis which is exempt from the prospectus and dealer registration requirements of such securities laws. The securities will be offered and sold in Canada on a private placement basis only to “accredited investors” pursuant to certain prospectus exemptions. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

(i) Note: A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.

TransAlta Renewables owns 16 wind and 12 hydroelectric power generation facilities, and holds economic interests in TransAlta’s Wyoming Wind Farm and Australian Assets, having an aggregate installed generating capacity of 1,856 MW, in which it holds a net ownership interest of approximately 1,680 MW. TransAlta Renewables’ economic interest in Australian assets consisting of 425 MW of power generation from six operating assets, which are operational and contracted under long-term contracts, and the 150 MW South Hedland project that is currently under construction, as well as the recently commissioned 270 km gas pipeline. TransAlta Renewables’ power generating capacity is among the largest of any publicly-traded renewable independent power producer (“IPP”) in Canada, with more wind power generating capacity than any other Canadian publicly-traded IPP. TransAlta Renewables’ strategy is focused on the efficient operation of its portfolio of assets and expanding its asset base through the acquisition of high-quality contracted renewable and natural gas power generation facilities and other infrastructure assets.