Palisade secures Samurai loan for $102m Waterloo Wind Farm refinancing

The Sydney-based fund manager turned to the Japanese market, with the debt facility underwritten by MUFG.

Palisade Investment Partners has secured a A$140 million ($101.6 million; €89.5 million) Samurai loan for its Waterloo Wind Farm in South Australia.

The Sydney-based fund manager secured a new eleven-and-a-half-year debt facility underwritten by Japanese bank MUFG. The facility will be syndicated to institutional investors in the Japanese lending and insurance market, with MUFG retaining a “material stake”, Palisade said in a statement.

Palisade declined to disclose any more financial terms of the deal other than to say the refinancing had been achieved on “highly attractive pricing and terms” due to Waterloo’s strong performance and credit position. Palisade had not responded to a request for comment at time of publication.

Samurai lending, or yen-denominated cross-border syndicated loans made to non-Japanese borrowers, has increased to the Australian infrastructure market in the past year, with notable deals in 2018 including a refinancing of the Sydney Desalination Plant, also underwritten by MUFG.

Palisade chief executive Roger Lloyd said in a statement: “The facility significantly de-risks Waterloo’s capital structure over the long term, while at the same time achieving attractive pricing and terms for investors.”

The Sydney-based firm manages a 74 percent stake in the Waterloo Wind Farm asset on behalf of its Renewable Energy Fund and another undisclosed direct investment mandate client. The remaining 26 percent is managed by Canada-based Northleaf Capital Partners. Palisade Integrated Management Services holds responsibility for the operating asset’s management.

Palisade and Northleaf first acquired a combined 75 percent interest in Waterloo Wind Farm in 2013 from Energy Australia, before the former increased its solo stake to 74 percent in 2015 to take the equity split to its current levels.

Waterloo Wind Farm is a 131MW facility located near the town of Clare in South Australia. Stage 1 of the project has a capacity of 111MW and has offtake agreements for 100 percent of its power with Hydro Tasmania and EnergyAustralia through to 2028.

Palisade oversaw the asset’s expansion with the installation of six 3.3MW turbines in 2016 for a combined capacity of 19.8MW, comprising Stage 2 of the project.

The Palisade Renewable Energy Fund has generated a total annual return since inception to 30 September 2018 of 16 percent, including an annual cash yield of 7.7 percent, Palisade said in a statement.

The fund has secured more than A$300 million in commitments from institutional investors since inception, including a A$75 million cornerstone commitment from the Clean Energy Finance Corporation, and is open to new commitments. Its portfolio of renewable energy assets includes Hallett Wind Farm, Ross River Solar Farm and Granville Harbour Wind Farm.