Thu | Oct 29, 2020

New Fortress to redeem bonds brokered by NCB Capital

Published:Friday | August 28, 2020 | 12:22 AM

Chairman and CEO of New Fortress Energy, Wes Eden.
Chairman and CEO of New Fortress Energy, Wes Eden.

New Fortress Energy will redeem the bonds that were brokered last year by NCB Capital Markets Limited on behalf of subsidiary company NFE South Power Holdings Limited, using proceeds from the US$1 billion of fresh capital raised by the natural gas supplier.

The US$180 million of bonds were issued last September to finance the construction of NFE’s power plant in Clarendon at the Jamalco alumina refinery.

The debt securities, which are being redeemed 14 to 16 years early, comprised US$136.3 million of 8.25 per cent secured long-term fixed-rate bonds due 2034, and up to US$43.7 million of 11 per cent unsecured long-term fixed-rate bonds due 2036. Comparatively, the US$1b of new debt raised this month was priced much cheaper at 6.75 per cent.

“The company intends to use the net proceeds from the offering, together with cash on hand, to repay in full the amounts outstanding under its credit agreement and to redeem in full the senior secured bonds and senior unsecured bonds issued by its subsidiary, NFE South Power Holdings Limited, terminating the credit agreement and the documentation governing such bonds, in each case including related premiums, costs and expenses,” New Fortress said in a release. The date of the redemption was not ascertained.

The company commissioned the Clarendon plant at Jamalco in March of this year, marking its entry into power production, and adding to gas infrastructure it owns in Montego Bay and Old Harbour.

New Fortress doubled its revenue in the June quarter to US$76 million, strengthened in part by earnings from the Jamalco 150MW LNG power facility. Of that amount, US$45 million was made in Jamaica, where it’s been delivering liquefied natural gas, or LNG, to clients for four years. The flows translate to about $6.5 billion in Jamaican currency.

The power plant supplies energy to the Jamalco alumina refinery, which is co-owned by the Jamaican Government and Noble Group; while the excess power will be sold to the national electricity grid operated by Jamaica Public Service Company.