Needham Bank Closes $25mm Loan to Wind Energy Project

1/4/2022

Needham Bank, which for more than a century has served as New England’s “Builder’s Bank,”  is pleased to announce it has closed a $25mm loan to an affiliate of SWEB Development USA (SWEB), Natick, MA for the development of a wind energy project in Maine.

The loan is based on the new CME Term SOFR (Secured Overnight Financing Rate), which will replace the current LIBOR standard, and includes a customized hedge to insulate the borrower from interest rate fluctuations. The debt facility also includes a customized repayment structure that will shadow the specific revenue generation of the project. 

“As volatility erupted in the market based on Omicron fears, we knew it was in SWEB’s interest to close this loan immediately. And we’re thrilled we were able to adopt the new SOFR standard before its formal adoption on January 1 by financial services firms,” said James Daley, SVP Director of Structured Finance. “We structured this loan with a payment schedule predicated on the sale of generated energy, and worked with Chatham’s Financial Institutions team to build in a customized hedge that will protect SWEB from rising interest rates.”

The project, when complete, will include five wind turbines in Clifton, ME that will produce 20 megawatts of clean energy, and will complement a nearby SWEB wind farm already in operation.

“Needham Bank was one of our first clients to embrace CME Term SOFR as a replacement for 1-month LIBOR,” said Matt Tevis, Managing Partner and head of Chatham’s Global Financial Institutions Team. “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 was hired at Needham Bank to run its Structured Finance team, which complements the bank’s commercial lending practices. The Structured Finance team focuses on transactions that require $10 million or more in senior secured debt facilities. The Structured Finance team also gives Needham Bank a platform to engage in larger non-real estate transactions through syndications and participation lending with other commercial banking institutions. 

Daley has executed similarly structured loans over the course of his career. “Loans like this can help expand the clean energy market in New England by meeting customers’ needs and understanding their businesses and growth plans,” said Daley. “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.” 

Through this new division Needham Bank partners with company owners, senior management teams, private equity sponsors and other corporate finance professionals to provide businesses with the right corporate debt solutions that meet their needs. Financing structures support growth and expansion, working capital needs, acquisition plans, new projects and even leverage-backed buyouts. 

About Chatham Financial

Chatham Financial is the largest independent financial risk management advisory and technology firm. A leader in debt and derivative solutions, Chatham provides clients with access to in-depth knowledge, innovative tools, and an incomparable team of over 600 employees to help mitigate risks associated with interest rate, foreign currency, and commodity exposures. Founded in 1991, Chatham serves more than 3,000 companies across a wide range of industries — handling over $750 billion in transaction volume annually and helping businesses maximize their value in the capital markets, every day. To learn more, visit www.chathamfinancial.com.