Shares in Harmony Energy Income Trust PLC (LSE:HEIT) jumped almost 7% on Thursday after the battery energy storage investor revealed refinanced debt arrangements.
This coincided with news that six of the company’s battery energy storage systems had won successful bids in the UK’s latest capacity market auction, with guaranteed prices for the power higher than expected, Harmony said.
Previous £110 million term and £20 million revolving credit facilities were amalgamated into one single facility meanwhile, with an extended maturity date from June 2027 to February 2031.
New interest rate hedging arrangements are expected to be in place, with margins on the latest deal representing a 25 and 50 basis point drop on the previous respective facilities.
“The debt refinancing provides a stable platform for the company to operate in the current lower revenue environment,” chair Norman Crighton said, “this continues to enable the company to complete construction of its remaining three projects”.
Shares climbed 6.8% to 39.50p.
Broker Stifel said the refinancing of the debt facility is "a welcome development given investor fears over solvency, especially as it signals lenders are comfortable with current gearing levels and that asset valuations are materially higher than implied by the share price (otherwise no lender would lend)".