CFC Leads $300M Syndication for Chugach Electric Association

CFC and Chugach Electric Association, Inc. closed an amend and extend transaction for a $300 million, five-year unsecured revolving credit facility this summer. Through the transaction, the Anchorage, Alaska-based generation, transmission and distribution cooperative was able to increase the size of the facility from $270 million to $300 million and extend the maturity date to July 2029. 

In mid-2023, the banking environment was very challenging for borrowers following the U.S. banking crisis when three large banks failed. During that time, two lenders exited Chugach’s syndicated credit facility. The remaining lenders were able to fill some of the shortfall, but not all.   

By mid-2024, Chugach was able to increase its facility to $300 million by bringing a former lender back into the syndicated credit facility. While doing so, the borrower requested lenders to extend the maturity date an additional year, preserving a five-year tenor.

“As Chugach’s primary liquidity facility, it was very important for us to retain our existing facility size and lenders,” Chugach CFO Sherri Highers said. “Fortunately, not only did the current amendment reinstate the existing facility size, but one of the departing lenders returned to the facility and the rest of the existing lenders extended their commitments.”

The driving factor for Chugach to complete the transaction was to reinstate the existing facility size to finance ongoing capital expenditures, which includes acceleration of its decarbonization program and provision for necessary long-term financing flexibility.

“The benefit of completing the transaction was to ensure financial planning predictability as we accelerate Chugach’s decarbonization program to achieve our strategic goals,” Highers said. “CFC has been a great stable and supportive partner, leading our unsecured syndicated transactions for almost two decades. Their market knowledge and lender relationships have been invaluable, and we look forward to continuing our trusted partnership into the future.”

Since 2005, CFC has completed more than $34.7 billion of syndicated loan transactions for electric cooperatives.

Chugach is Alaska’s largest electric utility and provides electricity and services to more than 90,000 members in a service area that extends from Anchorage to the northern Kenai Peninsula, westward to Tyonek, including Fire Island, and eastward to Whittier.