CFC Leads $520 Million Syndication for Tri-State G&T Assoc.

CFC and Tri-State Generation and Transmission Association recently closed an amend and restate (A&R) transaction for a $520 million, five-year senior secured revolving credit facility. Through the A&R, the Westminster, Colorado-based wholesale power supply cooperative was able to extend the maturity date of the facility from April 2023 to April 2027 while maintaining the existing pricing grid and realigning the bank group to better meet its future business needs. The financing serves as a core liquidity facility, a backstop for Tri-State’s commercial paper program and for general corporate purposes.

CFC became the sole lead arranger in 2018, and continues to serve as administrative agent.  Given that lenders are transitioning away from LIBOR-based loans, this was the first Secured Overnight Financing Rate (SOFR)-based syndicated credit facility arranged by CFC.

“Tri-State typically will renew our credit facility one year before its final maturity, so we had been planning to either amend and restate our prior agreement or enter into a new agreement this year,” Tri-State Corporate Finance Manager Jessica Lien said. “The timing of the financing was convenient due to the fact that we would have needed to address the LIBOR transition within a year. We amended our credit agreement so draws are based on adjusted term SOFR going forward.”

One new lender participated in the transaction in addition to CFC and five of the eight other existing lenders.

“CFC skillfully coordinated the syndication process, including helping Tri-State communicate with our bank group about the new SOFR-based pricing grid, as well as our goal to lower the facility size,” Lien said. “We added an ESG amendment provision to our credit agreement so that in the future we have the ability to add sustainability targets which, if met, would improve pricing on draws. CFC is the Sustainability Coordinator on the deal and will assist us when we’re ready to implement ESG targets.”

First Syndicated Credit Facility Arranged by CFC with ESG Amendment

This is the first syndicated credit facility CFC has arranged with an ESG amendment provision.  The ESG amendment provision provides borrowers with an option to include the sustainability-linked features in their credit agreements during the term of the credit facility subject to lenders’ consent. Financial data tracker Refinitiv reported that in the U.S., approximately 11 percent of this year’s first-quarter investment-grade loan volume was from sustainability-linked loans.

Since 2005, CFC has completed more than $27 billion of syndicated loan transactions for electric cooperatives.

With 45 members, Tri-State is one of the largest U.S. G&T cooperatives. Tri-State provides wholesale electricity and services to 42 electric distribution cooperatives and public power districts in Colorado, Nebraska, New Mexico and Wyoming. Its utility members supply electricity to more than 1 million electricity consumers. Tri-State is rapidly advancing its clean energy transition through its Responsible Energy Plan.