NEWARK, N.J.--(BUSINESS WIRE)--Prudential Capital Group provided financing in the form of $121 million of long-term senior notes to LS Power for a new solar power generating project in Maricopa County, Ariz. The financing is part of an innovative structure developed in partnership with Banco Santander S.A. that provided $466 million to support the development of the project. Prudential Capital Group is an investment business of Prudential Financial, Inc. (NYSE: PRU).
Prudential Capital Group jointly structured this unique debt transaction with Santander, which provided $295 million in short-term financing, in addition to Prudential Capital Group’s long-term financing, and $50 million from other institutional investors.
“In the current market environment where capital availability is tight, being creative and flexible is critical when it comes to helping companies expand and develop new projects,” said Ric Abel, managing director of Prudential Capital Group’s Energy Finance Group. “Our partnership with Santander on this transaction is a great example of private capital and banks working together to make large projects a reality.”
LS Power will use the capital to construct and operate Arlington Valley Solar Energy II, a 127-megawatt solar photovoltaic power generation facility situated on 1,200 acres in Maricopa County, Ariz. The company will sell all generated power to San Diego Gas & Electric as part of a 25-year power purchase agreement. Once completed, the project is expected to annually generate more than 275,000 megawatts of power in the first year of operation. Construction is scheduled to begin during the first quarter of 2012.
“This two-tranche financial solution aligns sponsors, banks and institutional investors’ interests,” said Jorge Camina, head of project & acquisition finance U.S. of Santander Global Banking & Markets. “It optimizes project capital structure, locks financing cost and extracts the full value of the long-term power purchase agreement, while appealing simultaneously to both the institutional and bank markets. Having Prudential as a partner has been crucial in developing a successful template. We expect many projects will follow the innovative path initiated by LS Power.”
“We are pleased to have completed the development and financing of this important solar project and look forward to commencing construction,” said John King, executive vice president of LS Power. “This project will bring many benefits to the State of Arizona and Maricopa County, including construction and operations jobs with local business opportunities and longer-term benefits from tax revenues. Renewable energy deliveries will assist SDG&E and the State of California in reaching their renewable energy goals.”
Prudential Capital Group has been a leading provider of private debt, mezzanine and equity securities to companies worldwide for more than 70 years. Managing a portfolio of $59.2 billion as of December 31, 2011, Prudential Capital offers senior debt and mezzanine capital, leverage leases, credit tenant leases, and equipment finance to companies, worldwide. The global regional office network has locations in Atlanta, Chicago, Dallas, Frankfurt, London, Los Angeles, Minneapolis, Newark, N.J., New York, Paris and San Francisco. For more information, please visit www.prudentialcapitalgroup.com.
Prudential Financial, Inc. (NYSE: PRU), a financial services leader with approximately $901 billion of assets under management as of December 31, 2011, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. In the U.S., Prudential’s iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit http://www.news.prudential.com/.