Gosfield Wind Financial Corporation (“Gosfield” or the “Borrower”) is a special purpose entity that acts as the financing vehicle for the Gosfield Wind Limited Partnership (“GW” or the “Project”). The Borrower’s obligations are fully guaranteed by GW. GW is a 50.6 MW wind farm located in Southern Ontario. The Project sells all of its energy output at a fixed rate to the Independent Electricity System Operator of Ontario (the “IESO”) (Aa2) pursuant to a 20-year PPA (COD was achieved 27 months prior to the COD milestone date of December 31, 2013. The IESO extended the PPA term by 27 months and effectively making it a 22-year PPA). The Project Sponsor is Brookfield Renewable Energy Partners LP (“Brookfield”) (BBB). In 2013, SFS EF AM committed CAD 50 million (USD 38.5 million) to the Borrower’s CAD 130.6 million Senior Secured Term Loan. The 18.75-year Term Loan will fully amortize by 2032, one year before the expiry of the PPA. The SFS EF AM’s share of the Term Loan balance, at the end of April 2016, was about CAD 43.8 million (USD $33.8 million, CAD 1=USD 0.77). The operating performance continued to be stable as noted in the last rating review completed on April, 17, 2015. In 2015, the average wind speed was measured around 6.1 m/s, slightly below the SFS EF AM’s wind speed projection of about 7.2 m/s, but in line with the historical wind speed levels. Compensable energy output was slightly below the SFS EF AM forecast, reflecting low wind resource in the region.
The operating costs continued to be below the SFS EF AM forecast, reflecting a conservative forecast as well as low equipment/critical part failure rate. The 2015 availability factor of 98.6% was slightly better than the SFS EF AM forecast of 97% and in line with...
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...t performance. In addition, the maintenance agreement is automatically renewable on maturity. The risk assessment was changed to “Neutral/Standard” from “Slightly worse”. The Borrower is highly leveraged and the book equity at the end of 2014 was negative. The risk assessment was changed to “Clearly worse”. The risk assessment for the financial cover ratios (Minimum and average DSCRs) was changed to the SFS EF AM Base case forecast that used P50 exceedance level output. Lack of a performance based LD provision in the Management, Operations and Maintenance agreement and short-term nature of the contract resulted in the risk assessment as “slightly worse”. High leverage, the debt to equity ratio at close was high (96:4). Tail is <10%. Weak financial measures (Minimum and the average DSCR used to assess the risk were based on the P-90 (1-year) exceedance level output).
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