Ormat Technologies, Inc. (NYSE:ORA) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
Entry into a Material Definitive Agreement.
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Item 1.01. |
Financial Statements and Exhibits. |
Exhibit Index
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Exhibit 99.1 |
Press Release of the Company dated March, 201. |
INFORMATION TO BE INCLUDED IN THE REPORT
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Item 1.01. |
Entry into a Material Definitive Agreement. |
On March 22, 2018 Ormat Technologies, Inc. (the “Company”) entered into a definitive loan agreement (the "Loan Agreement") with Migdal Insurance Company Ltd., Migdal Makefet Pension and Provident Funds ltd. and Yozma Pension Fund of Self Employed Ltd., all entities within the Migdal Group, a leading insurance company and institutional investor in Israel. The Loan Agreement provides for a loan by the lenders to the Company in an aggregate principal amount of $100 million (the “Loan”).
The outstanding principal amount of the Loan will be repaid in 15 semi-annual payments of $4.2 million each, commencing on September 15, 2021, with a final payment on March 15, 2029 of $37 million. The average duration of the Loan is 7 years. The Loan bears interest at a fixed rate of 4.8% per annum, payable semi-annually, subject to adjustment in certain circumstances as described below.
The Loan is subject to early redemption by the Company prior to maturity from time to time (but not more frequently than once per quarter) and at any time in whole or in part, at a redemption price set forth in the Loan Agreement. The Company is ranked “ilAA-” by Maalot S&P in Israel with a stable outlook. If the rating of the Company is downgraded to "ilA-", the interest rate applicable to the Loan will be increased by 0.50%. If the rating of the Company is further downgraded, the interest rate applicable to the Loan will be further increased by 0.25% per each additional downgrade notch. In no event will the cumulative interest rate applicable to the Loan increase by more than 1% in total, regardless of the cumulative rating downgrade. A subsequent reinstatement of a rating level will reduce the interest rate applicable to the Loan by 0.25% per each notch (but in no event will interest on the Loan reduce below the base rate of 4.8%).
Additionally, if the ratio between short-term and long-term debt to financial institutions and bondholders, deducting cash and cash equivalents to EBITDA is equal to or higher than 4.5, the interest rate on all amounts then outstanding under the Loan shall be increased by 0.5% per annum over the then applicable interest rate on the Loan.
The Loan constitutes senior unsecured indebtedness of the Company and will rank equally in right of payment with any existing and future senior unsecured indebtedness of the Company, and effectively junior to any existing and future secured indebtedness, to the extent of the security therefor.
The Loan Agreement includes various affirmative and negative covenants, including a requirement that the Company maintain (i) a debt to adjusted EBITDA ratio below 6, (ii) a minimum equity amount (as shown on its consolidated financial statements, excluding noncontrolling interests) of not less than $650 million, and (iii) an equity (excluding noncontrolling interest) to total assets ratio of not less than 25%. In addition, the Loan Agreement restricts the Company from making dividend payments if its equity falls below $800 million and otherwise restricts dividend payments in any one year to not more than 50% of the net income of such year as shown on the Company’s consolidated annual financial statements as long as any of the Company's bonds issued in Israel prior to March 27, 2018 remain outstanding.
The Loan Agreement includes other customary affirmative and negative covenants, including payment and covenant events of default.
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Item 1.01. |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth under “Item 1.01. Entry into a Material Definitive Agreement” is incorporated herein by reference.
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Item 1.01. |
Financial Statements and Exhibits. |
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Exhibit 99.1 |
Press Release of the Company dated March 27, 2018 |
ORMAT TECHNOLOGIES, INC. ExhibitEX-99.1 2 ex_109035.htm EXHIBIT 99.1 ex_109035.htm Exhibit 99.1 Ormat Technologies,…To view the full exhibit click here
About Ormat Technologies, Inc. (NYSE:ORA)
Ormat Technologies, Inc. is engaged in the geothermal and recovered energy power business. The Company designs, develops, builds, owns and operates geothermal and recovered energy-based power plants. The Company’s equipment manufacturing operations are located in Israel. The Company conducts its business activities in two business segments: Electricity segment and Product segment. The Company’s Electricity segment develops, builds, owns and operates geothermal and recovered energy-based power plants in the United States and geothermal power plants in other countries around the world, and sells the electricity it generates. The Company’s Product Segment designs, manufactures and sells equipment for geothermal and recovered energy-based electricity generation, remote power units and other power generating units, and provide services relating to the engineering, procurement, construction, operation and maintenance of geothermal, and recovered energy-based power plants.