Bulletin: NEP/NCP Holdco Inc.'s Proposed Maturity Extensions Will Reduce Its Refinancing Risk Over The Next Two Years

This report does not constitute a rating action. NEW YORK (S&P Global Ratings) Dec. 12, 2023--S&P Global Ratings today said that NEP/NCP Holdco Inc.?s (NEP) proposed extension of the maturities of its first-lien term loans to 2026, from 2025, would reduce the company's refinancing risk over the next two years. We believe the maturity extension would provide NEP with additional time to execute on its NEP 360 plan and demonstrate an increase in its free operating cash flow (FOCF) generation, supported by its significantly lower capital expenditure and improved operating efficiencies from the cost savings actions it has taken and will continue to implement over the next couple of quarters. In turn, this could strengthen the company's ability to refinance

...December 12, 2023 This report does not constitute a rating action. NEW YORK (S&P Global Ratings) Dec. 12, 2023--S&P Global Ratings today said that NEP/NCP Holdco Inc.'s (NEP) proposed extension of the maturities of its first-lien term loans to 2026, from 2025, would reduce the company's refinancing risk over the next two years. We believe the maturity extension would provide NEP with additional time to execute on its NEP 360 plan and demonstrate an increase in its free operating cash flow (FOCF) generation, supported by its significantly lower capital expenditure and improved operating efficiencies from the cost savings actions it has taken and will continue to implement over the next couple of quarters. In turn, this could strengthen the company's ability to refinance its entire capital structure in the next two years. The proposed amendment and extension would add a layer of payment-in-kind (PIK) interest (150 basis points [bps]) to the existing cash interest payments, an upfront PIK...

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