Rentech, the Los Angeles-based renewable energy developer, has refinanced an $85 million term-loan and says it could tap its new $125 million credit to finance a 55 megawatt biomass power project in Florida.
Long-time Rentech banker Credit Suisse arranged the refinancing. The original $85 million loan was secured in early 2010 from a diverse creditor group that included New York hedge fund Highbridge Capital Management and Goldman Sachs. A recent regulatory filing shows Highbridge is participating in the new $125 million, five-year loan. Names of other lenders weren’t available.
The five-year loan is priced at 8.5 percent compared to 12.5 percent for the previous facility. Rentech expects the refinancing will save it roughly $3.5 million a year. A Rentech executive says the new loan could finance a portion of its 55 megawatt Saint Joe biomass project in Florida.
The new loan comes as Rentech has begun mapping alternative financing for its St. Joe project. Until last month the company was counting on a stimulus-funded Department of Energy loan guarantee for a majority of the funding. That changed when, blaming a deep backlog of projects, some farther along in their development than Saint Joe, the DOE placed Rentech’s loan application on hold.
Because of the DOE decision, Rentech has begun approaching commercial banks to potentially arrange project finance debt. “We’ve not given up on the DOE, which is cheaper money, but we are looking at alternatives,” the Rentech executive explains.
Besides Saint Joe, Rentech is also developing biofuel refineries in Canada, and California.