{"id":41874,"date":"2021-01-22T21:18:37","date_gmt":"2021-01-23T02:18:37","guid":{"rendered":"http:\/\/prefblog.com\/?p=41874"},"modified":"2021-01-22T21:18:37","modified_gmt":"2021-01-23T02:18:37","slug":"azp-put-on-watch-negative-by-sp","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=41874","title":{"rendered":"AZP Put On Watch-Negative By S&#038;P"},"content":{"rendered":"<p>Standard &#038; Poor&#8217;s <a href=\"https:\/\/www.standardandpoors.com\/en_US\/web\/guest\/article\/-\/view\/type\/HTML\/id\/2583879\">has announced<\/a>:<\/p>\n<blockquote>\n<ul>\n<li>Atlantic Power Corp. (APC) announced it has entered into an agreement to be acquired by I Squared Capital for $3.03 per share.\n<li>The ratings on our &#8216;BB-&#8216; issuer credit rating on APC are unchanged and we are placing the company&#8217;s ratings on CreditWatch with negative implications.\n<li>At the same time, we are placing the issue-level ratings on APLP Holdings L.P.&#8217;s term loan B, $180 million revolving credit facility, and Atlantic Power L.P.&#8217;s C$210 million medium-term notes on CreditWatch with negative implications.\n<li>We are also placing the preferred shares at Atlantic Power Preferred Equity Ltd. (APLP) on CreditWatch with negative implications.\n<li>The CreditWatch placements capture our view that the new sponsor could alter the capital structure.<\/ul>\n<p>S&#038;P Global Ratings today took the rating actions listed above. Pro forma for the transaction, Atlantic Power&#8217;s financial policy will be determined by I Squared, which we would most likely designate a financial sponsor. We typically expect financial sponsors to use leverage to fund transactions to achieve returns. Consequently, ratings are generally lower for financial sponsor-owned companies than strategically owned entities. However, I Squared indicated it plans to redeem some debt and reorganize APC&#8217;s capital structure. We will monitor and reassess financial policy, forward leverage, and any changes to the business strategy as we obtain additional clarity on I Squared&#8217;s plan and as the transaction approaches financial close.<\/p>\n<p>Following the necessary approvals by APC&#8217;s board, shareholders, and regulators, we anticipate common shareholders will receive $3.03 per share at the close of the transaction. The unsecured convertible debt due Jan. 31, 2025, will be converted to common shares for $3.03, plus accrued and unpaid interest. The company&#8217;s senior secured term loan will also be redeemed at 101% of principal. Atlantic Power Preferred&#8217;s shares will be redeemed for C$22 each in cash. Atlantic Power L.P.&#8217;s 5.95% medium term notes due June 23, 2036, will be redeemed for consideration equal to 106.071% of the principal amount plus accrued and unpaid interest at financial close.<\/p>\n<p>The CreditWatch listing reflects the likelihood that I Squared&#8217;s financial policy will inform the rating on Atlantic Power pro forma for the transaction. We would most likely classify I Squared as a financial sponsor. Consequently, any rating implications will depend on the forward capital structure, our assessment of the business strategy, and most important how we assess I Squared&#8217;s financial policy with regard to APC. We will likely resolve the CreditWatch when the transaction closes, projected for the second quarter of 2021.<\/p><\/blockquote>\n<p>Affected issues are AZP.PR.A, AZP.PR.B and AZP.PR.C.<\/p>\n<p>I have previously reported the <a href=\"http:\/\/prefblog.com\/?p=41851\">proposed redemption at $22 of these issues<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Standard &#038; Poor&#8217;s has announced: Atlantic Power Corp. (APC) announced it has entered into an agreement to be acquired by I Squared Capital for $3.03 per share. The ratings on our &#8216;BB-&#8216; issuer credit rating &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-41874","post","type-post","status-publish","format-standard","hentry","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/41874","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=41874"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/41874\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=41874"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=41874"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=41874"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}