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Ormat refinancing loans to profit from better market rates

Ormat refinancing loans to profit from better market rates Germencik 2 (Effe 3) Geothermal Power Plant, Turkey (source: Ormat Technologies)
Alexander Richter 4 Aug 2016

Ormat is going to raise $250 million in an effort to cut down debt service costs profiting from lower interest rates in the current market.

Reported in connection with its recently presented quarterly results, Ormat has announced it will seek to profit from current market conditions on the lending market.

The company is planning to raise around $250 million in non-tradeable debt. Ormat wants to refinance a current $250 million bond series with a 7% interest and a repayment date of August 2017 to a new loan package at an interest to current market rates of 3-5%.

With current market conditions a lot of investment funds are looking for new investment opportunities that will yield a fair return potential. Currently national banks provide nearly zero percent interest rates.

Ormat Technologies is controlled by FIMI Opportunity Funds, one of the top private equity investment funds operating in Israel. FIMI has been very active in adapting the structure of Ormat, merging Ormat Industries and Ormat Technologies in late 2014, simplifying the holding structure and adding a financial partner to some of the assets of the company in the U..S.

Source: Globe