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Financial Restructuring Agreement for Third Federal Loan Guarantee and LIL Investment Finalized

March 31st, 2022

Newfoundland and Labrador Hydro today announced the finalization of the $1 billion federal loan guarantee and capital restructuring for Muskrat Falls (MF) and the Labrador Transmission Assets (LTA). This is part of the $5.2 billion Rate Mitigation Plan to ensure electricity rates will not double as a result of Muskrat Falls.

Following signing of the term sheets this past February, a Request for Financing was issued to obtain the best financing solution that optimizes the value of Canada AAA credit rating provided through the additional federal loan guarantee. This is the same structure used for the 2013 and 2017 financing process.

The 2022 financing process has now concluded and NL Hydro has secured $1.0 billion in additional financing that was underwritten by CIBC through a series of 21 bonds. These bonds benefit from a direct, absolute, unconditional and irrevocable guarantee by the Government of Canada. The effective average interest rate for the bond issuance was 3.38%.

Quotes
“We know customers are concerned about electricity rates, and our priority is to provide safe, reliable service to customers at the lowest possible cost as we manage the provincial electricity system. The financial restructuring secured through this bond issuance with CIBC is yet another critical step forward in the rate mitigation process, which ensures customer rates will not double. “Jennifer Williams
President and CEO, Newfoundland and Labrador Hydro

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Learn More
https://www.gov.nl.ca/releases/2022/exec/0214n02/



Media Contact:

Jill Pitcher
Senior Communications Advisor, Newfoundland and Labrador Hydro
t. 709.737.1219 / c. 709.689.9938 e. JillPitcher@nalcorenergy.com