CFC Leads $425M Syndication for AECC

CFC and Arkansas Electric Cooperative Corporation (AECC) recently closed an amend and extend transaction for a $425 million, four-year unsecured revolving credit facility. Through the transaction, the Little Rock, Arkansas-based generation and transmission cooperative was able to increase the size of the facility from $250 million to $425 million and extend the maturity date by three years to March 2028. AECC increased its facility due to expected increases in capital expenditures over the next five years, beginning in 2025. 

“With the pending retirement of two coal power plants and expected additional load growth over the next five years, AECC will need to make significant capital investments in new generation,” AECC CFO Brandon Lohse said. “In addition to the fact our existing credit facility expires in a year, the primary driver for timing this transaction now is that there are currently long lead times for electric generation turbines that require we begin reserving production slots today, as well as start spending on site surveys, permitting and environment assessments.”

Three of the five existing lenders increased their commitments, including CFC’s additional commitment of $125 million, bringing its total commitment to $180 million.

“The CFC team is always great to work with,” Lohse said. “Their knowledge of the market and collaborative approach to syndication makes for a much more productive and effective process.” 

Despite the current challenging banking environment, Lohse added, “With many lenders exiting or reducing exposure to various markets and issues, CFC was willing to step up and increase its capacity to cover what was reduced by other commercial lenders. Beyond competitive rates, this really highlights the huge benefit CFC’s cooperative business model provides to its members.”

Since 2005, CFC has completed more than $32.4 billion of syndicated loan transactions for electric cooperatives.

AECC provides wholesale electricity and services to 17 electric distribution cooperatives in Arkansas. Its utility members supply electricity to more than 1.3 million consumers. AECC is one of the country’s top credit-quality rated generation and transmission cooperatives.