ORMAT TECHNOLOGIES, INC. — Capital/Financing Update 2016

Sep 14, 2016

8-K 1 ora20160913_8k.htm FORM 8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): September 14, 2016

Ormat Technologies, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware (State or Other Jurisdiction of Incorporation)

001-32347 (Commission File Number)

No. 88-0326081 (I.R.S. Employer Identification No.)

6225 Neil Road, Reno, Nevada (Address of Principal Executive Offices) 89511-1136 (Zip Code)

(775) 356-9029 (Registrant's Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

• ☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
• ☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
• ☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
• ☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

• Item 1.01 Entry into a Material Definitive Agreement.
• Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
• Item 9.01. Financial Statements and Exhibits.

Signatures

Exhibit Index

Exhibit 99.1 Press Release of the Company dated September 11, 2016.

INFORMATION TO BE INCLUDED IN THE REPORT

Item 1.01. Entry into a Material Definitive Agreement.

On September 14, 2016 Ormat Technologies, Inc. (the "Company") entered into two deed of trust agreements (each, a "Trust Deed") with Mishmeret Trust Services Company, Ltd., as trustee, governing the issuance of senior unsecured bonds in an aggregate principal amount of \$204.3 million (the "Bonds"). The Company issued the Bonds on September 14, 2016 in an unregistered offering outside the United States to investors who are not "U.S. persons", as such term is defined in Regulation S under the Securities Act of 1933, as amended (the "Securities Act"), and otherwise subject to the requirements of Regulation S.

The Bonds were issued in two Series. The Series 2 Bonds, issued in an aggregate principal amount of \$67.2 million, will mature in September 2020 and bear interest at a fixed rate of 3.7% per annum, payable semi-annually. The Series 3 Bonds, issued in an aggregate principal amount of \$137.1 million, will mature in September 2022 and bear interest at a fixed rate of 4.45% per annum, payable semi-annually. The interest rate on the bonds is subject to adjustment in certain circumstances as described below.

The Bonds are ranked "ilA+" by Maalot S&P in Israel with a stable outlook. In the event that the rating of the Bonds is downgraded by two rating levels, the interest rate applicable to each Series of Bonds will be increased by 0.50%. In the event that the rating of the Bonds is further downgraded, the interest rate applicable to each Series of Bonds will be further increased by 0.25% per each additional downgrade notch. In no event will the cumulative interest rate applicable to each Series of Bonds increase by more than 1% in total, regardless of the cumulative rating downgrade. A subsequent reinstatement of a rating level will reduce the interest rate applicable to each Series of Bonds by 0.25% per each notch (but in no event will interest on the bonds reduce below the base rate of 3.7% for the Series 2 and 4.45% for the Series 3, respectively). If the Bonds cease to be rated for reasons attributable to the Company, the interest rate applicable to each Series of Bonds will be increased by 1%.

At any time and for so long as the Company's ratio of debt to Adjusted EBITDA exceeds 4.5, the interest rate applicable to each Series of Bonds will be increased by 0.50%.

The Bonds constitute senior unsecured obligations of the Company and will rank equally in right of payment with any existing and future senior unsecured indebtedness of the Company, and effectively junior to any existing and future secured indebtedness, to the extent of the security therefor.

The terms of both Trust Deeds are generally identical (other than with respect to tenor and interest rate for the separate Series of Bonds) and include covenants that require the Company to maintain a debt to adjusted EBITDA ratio below 6, a minimum equity amount (as shown on its consolidated financial statements, excluding noncontrolling interests) of not less than \$650 million, and an equity (excluding noncontrolling interest) to total assets ratio of not less than 25%. In addition, the Trust Deeds prohibit the Company from making dividend payments if its equity falls below \$800 million and otherwise restrict dividend payments in any one year to less than 50% of the net income of such year, as shown on the Company's consolidated annual financial statements.

The Bonds may be subject to acceleration upon a vote of the requisite Bondholders if (i) the equity (excluding noncontrolling interest) to total assets ratio falls below 25% for any period that exceeds two consecutive quarters, (ii) the debt to adjusted EBITDA ratio is greater than 5 for a period of one year, (iii) the debt to adjusted EBITDA ratio is greater than 6 (at any time), or (iv) the minimum equity amount (excluding noncontrolling interest) falls below \$650 million for any period that exceeds two consecutive quarters.

The Bonds are subject to mandatory redemption if the Company (i) fails to list the Bonds for trading on the TACT-Institutional trading system maintained by the Tel Aviv Stock Exchange for trading of privately placed securities within sixty (60) days, or (ii) does not use the proceeds of the bonds within 180 days to prepay its outstanding bonds that mature on August 2017.

The Trust Deeds also include other customary payment and covenant events of default.

The Bonds are also subject to early redemption by the Company prior to maturity from time to time (but not more frequently than once per quarter) and at any time following listing of the Bonds, in whole or in part, at a redemption price equal to the greater of (1) the principal amount being redeemed, plus accrued and unpaid interest on such amount through the redemption date, or (2) the sum of the remaining installments of principal plus interest discounted at the yield of benchmark Treasury securities (selected and determined in the manner set forth in the Trust Deed) plus 1%.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth under "Item 1.01. Entry into a Material Definitive Agreement" is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits*

Exhibit 99.1 Press Release of the Company dated September 11, 2016

* Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, a copy of the Trust Deed and the form of Bonds referred to in this Current Report on Form 8-K is not filed. The Company will furnish a copy thereof to the Securities Exchange Commission upon request.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Ormat Technologies, Inc.

By:/s/ Isaac Angel

Name: Isaac Angel Title: Chief Executive Officer

Date: September 14, 2016

EXHIBIT INDEX

Exhibit

Number Description of Exhibit

99.1 Press Release of the Company dated September 11, 2016.

Exhibit 99.1

PRESS RELEASE

Smadar Lavi Rob Fink/Brett Maas Investor Relations Hayden - IR 775-356-9029 (ext. 65726) 646-415-8972/646-536-7331

Ormat Technologies Contact: Investor Relations Agency Contact: slavi@ormat.com rob@haydenir.com / brett@haydenir.com

Ormat Technologies Inc. Concludes Auction to Price \$204 Million Aggregate Principal Amount of Senior Unsecured Bonds in Proposed Regulation S Offering

Reno, Nevada, September 11, 2016 -- Ormat Technologies, Inc. (NYSE: ORA) is pleased to announce that it has concluded an auction tender and accepted subscriptions for US\$204 million aggregate principal amount of two tranches (Series 2 approximately \$ 67 million and Series 3 approximately 137 million) of senior unsecured bonds (the "Series 2 Bonds", the "Series 3 Bonds" and, collectively, the "Bonds"). . Ormat will issue the Bonds in an unregistered offering outside the United States to investors who are not "U.S. persons", as such term is defined in Regulation S under the Securities Act of 1933, as amended (the "Securities Act"), and otherwise subject to the requirements of Regulation S.

The Series 2 Bonds will mature in September 2020 and bear interest at a fixed rate of 3.7% per annum, payable semiannually. The Series 3 Bonds will mature in September 2022 and bear interest at a fixed rate of 4.45% per annum, payable semi-annually. The Bonds will be repaid at maturity in a single bullet payment, unless earlier prepaid by Ormat pursuant to the terms and conditions of the trust instrument that will govern the Bonds. Both tranches received a rating of ilA+ from Maloot S&P in Israel with a stable outlook.

Ormat intends to use the proceeds from the offering and sale of the Bonds to prepay existing indebtedness, including prepayment fees of approximately \$5 million. Ormat expects its annual interest expense to decrease as a result of this refinancing.

The Bonds will be listed on the TACT-Institutional System maintained by The Tel Aviv Stock Exchange Ltd. The Bonds will not be resold in the United States or to any "U.S. person" absent registration under the Securities Act or the availability of an applicable exemption from the registration requirements under the Securities Act.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the Bonds, nor shall there be any offering or sale of Bonds in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

About Ormat Technologies

With over five decades of experience, Ormat Technologies, Inc. is a leading geothermal company and the only vertically integrated company engaged in geothermal and recovered energy generation (REG), with the objective of becoming a leading global provider of renewable energy. The company owns, operates, designs, manufactures and sells geothermal and REG power plants primarily based on the Ormat Energy Converter - a power generation unit that converts low-, medium- and high-temperature heat into electricity. With 72 U.S. patents, Ormat's power solutions have been refined and perfected under the most grueling environmental conditions. Ormat has 450 employees in the U.S. and over 600 employees overseas. Ormat's flexible, modular solutions for geothermal power and REG are ideal for the vast range of resource characteristics. The company has engineered, manufactured and constructed power plants, which it currently owns or has installed for utilities and developers worldwide, totaling over 2,000 MW of gross capacity. Ormat's current 707 MW generating portfolio is spread globally across the U.S., Guatemala, Guadeloupe and Kenya.

Ormat's Safe Harbor Statement

Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to Ormat's plans, objectives and expectations for future operations and are based upon its management's current estimates and projections of future results or trends. Actual future results may differ materially from those projected, including Ormat's expectation that its annual interest expense will decrease, as a result of certain risks and uncertainties. For a discussion of such risks and uncertainties, see "Risk Factors" as described in Ormat Technologies, Inc.'s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2016.

These forward-looking statements are made only as of the date hereof, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.