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Photo by Miya.m | CC BY-SA 3.0
Needham Bank’s new structured finance team has provided a $25 million loan to a renewable energy company for a wind energy project in Maine.
Needham Bank provided the loan to an affiliate of Natick-based SWEB Development USA for a project in Clifton, near Bangor, that includes five wind turbines producing 20 megawatts of clean energy, Needham Bank said in a statement.
“As volatility erupted in the market based on Omicron fears, we knew it was in SWEB’s interest to close this loan immediately,” James Daley, Needham Bank’s senior vice president and director of structured finance, said in the statement. ”And we’re thrilled we were able to adopt the new SOFR standard before its formal adoption on January 1 by financial services firms.”
Needham Bank said the loan is based on the new CME Term SOFR (Secured Overnight Financing Rate), which will replace the current LIBOR standard. The loan includes a customized hedge to protect the borrower from interest rate fluctuations, the statement said, and the debt facility includes a customized repayment structure that will shadow the specific revenue generation of the project.
The $2.9 billion-asset Needham Bank worked with financial risk management advisory and technology firm Chatham Financial on customizing the loan structure.
“Needham Bank was one of our first clients to embrace CME Term SOFR as a replacement for 1-month LIBOR,” Matt Tevis, managing partner and head of Chatham’s global financial institutions team, said in the statement. “Chatham’s SwapDesk worked closely with James Daley to structure and deliver a tailor-made hedging solution that focused on the custom cashflows and long-term financing needs of the deal, while also achieving the bank’s and the borrower’s interest rate risk management objectives.”
Daley leads Needham Bank’s structured finance team, which launched this year and focuses on transactions with $10 million or more in senior secured debt facilities. Needham Bank said the team also gives the bank a platform for larger non-real estate transactions through syndications and participation lending with other commercial banking institutions.
“Loans like this can help expand the clean energy market in New England by meeting customers’ needs and understanding their businesses and growth plans,” Daley said. “I’m proud that Needham Bank is committed to the clean energy sector with innovative financing that continues a 130-year history of meeting builders’ needs.”
