DBRS Comments on BREP’s Acquisition of 85 MW of Hydroelectric Assets in New England and California

DBRS notes that Brookfield Renewable Energy Partners L.P.’s (BREP or the Company; rated BBB (high)) announcement to acquire 85 megawatts (MW) of hydroelectric assets (the Acquisition) is not expected to have a material impact on BREP’s financial and business risk profile. Due to BREP’s prudent financing strategy and the relatively modest size of the Acquisition, the Company’s debt-to-capital on a deconsolidated basis will likely remain below 20% and free cash flow is expected to increase modestly.

The Acquisition consists of nine hydroelectric facilities in Maine with a combined capacity of 70 MW. These facilities have an average expected generation of approximately 375,000 megawatt hours annually, with approximately 40% of the output being sold under long-term contract to local utilities until 2024 and 2028. In addition, the Acquisition also consists of the remaining 50% interest in the 30 MW Malacha hydroelectric facility in California with fully contracted output until 2028. The Acquisition is expected to close before the end of 2013 and will be funded with the Company’s available liquidity, available capital from BREP’s institutional partners and non-recourse debt.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodology is Rating Companies in the Non-Regulated Electric Generation Industry (May 2011), which can be found on our website under Methodologies.