Primary Energy Recycling Announces Completion of Refinancing

OAK BROOK, IL, May 24, 2012 /CNW/ - Primary Energy Recycling Corporation ("Primary Energy Recycling" or the "Company") (TSX: PRI), a clean energy company that generates revenue from capturing and recycling recoverable heat and byproduct fuels from industrial processes, today announced the closing of a US$110 million senior secured credit facility (the "New Credit Facility").

The proceeds of the New Credit Facility have been applied to fully retire the Company's outstanding US$36.4 million term loan, and will be used to fund the previously announced purchase of Atlantic Power Corporation's common membership interests in Primary Energy Recycling Holdings LLC ("PERH").

"The completion of this transaction facilitates the impending closure and funding of the Atlantic Power transaction, provides the Company greater financial flexibility, and lowers our borrowing cost by approximately 180 basis points," said John Prunkl, President and Chief Executive Officer of Primary Energy Recycling. "This series of transactions will increase shareholder ownership and allow us to move forward as an independently managed company."

The New Credit Facility will include three tranches of debt:

• $25 million 5-year revolver at Libor plus 300 basis points with no Libor floor
• $50 million 5-year term loan at Libor plus 300 basis points with no Libor floor
• $35 million 7-year term loan at Libor plus 425 basis points with a 125 basis point Libor floor

The cost of borrowing (including up-front and original issue discount fees, and hedges) for the New Credit Facility is approximately 5.1% based on current Libor. Principal repayment is primarily achieved by periodic 50% cash flow sweeps plus modest quarterly amortization payments.  The revolver will be undrawn at close.

The existing senior debt that will be retired is at Libor plus 450 basis points with a 200 basis point Libor floor, and has a borrowing cost (including original issue discount fees) of approximately 6.9% based on current Libor.

Scotiabank Global Banking and Markets and RBC Capital Markets acted as joint lead arrangers and joint bookrunners on the New Credit Facility. 

On February 16^th, 2012, the Company announced an agreement with Atlantic Power Corporation to purchase the 7,462,830.33 common membership interests in PERH (14.3% of PERH total common membership interests) not currently held by the Company.

Primary Energy Recycling anticipates that its transaction with Atlantic Power Corporation will close on or before May 31, 2012.

About Primary Energy Recycling Corporation

Primary Energy Recycling Corporation owns a majority interest in Primary Energy Recycling Holdings LLC ("PERH"). PERH, headquartered in Oak Brook, Illinois, indirectly owns and operates four recycled energy projects and a 50 per cent interest in a pulverized coal facility (collectively, the "Projects"). The Projects have a combined electrical generating capacity of 283 megawatts and a combined steam generating capacity of 1.8M lbs/hour. PERH creates value for its customers by recycling recoverable heat and byproduct fuels from industrial and electric generation processes and converting it into reliable and economical electricity and thermal energy for resale back to its customers. For more information, please see www.primaryenergy.com.

Forward-Looking Statements

When used in this news release, the words "anticipate", "expect", "project", "believe", "estimate", "forecast" and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks, uncertainties and assumptions pertaining, but not limited, to completion, timing and the anticipated benefits of the transaction with Atlantic Power Corporation and the anticipated benefits of the New Credit Facility described in this press release, operating performance, regulatory parameters, weather and economic conditions and other factors discussed in the Company's public filings available on SEDAR at www.sedar.com. These forward-looking statements are made as of the date of this press release and the Company assumes no obligation to update or revise them to reflect new events or circumstances except as required by applicable securities laws. 

For Primary Energy please contact:
Chief Financial Officer
Mike Alverson
630.230.1314
[email protected]

Media and Investor Relations
Adam Peeler
416.815.0700 ext. 225
[email protected]