11. Long‑term debt

Long‑term debt consists of the following:


	December 31,		December 31,
	2015		2014		Interest Rate
Recourse Debt:
Senior secured term loan facility, due 2021	$	473.2	$	541.5	LIBOR(1)	plus	3.75	%
Senior unsecured notes, due 2018		—		319.9			9.00	%
Senior unsecured notes, due June 2036 (Cdn$210.0)		151.7		181.0			5.95	%
Non-Recourse Debt:(2)
Epsilon Power Partners term facility, due 2019		19.5		25.5	LIBOR	plus	3.125	%
Cadillac term loan, due 2025		29.5		33.4	LIBOR	plus	1.37	%
Piedmont term loan, due 2018		59.0		64.0	LIBOR	plus	3.50	%
Other long-term debt		0.4		0.6	5.50	% -	6.70	%
Less: current maturities		(15.8)		(20.0)
Total long-term debt	$	717.5	$	1,145.9

Current maturities consist of the following:


	December 31,		December 31,
	2015		2014		Interest Rate
Current Maturities(2):
Senior secured term loan facility, due 2021	$	4.7	$	5.4	LIBOR(1)	plus	3.75	%
Epsilon Power Partners term facility, due 2019		6.0		6.1	LIBOR	plus	3.125	%
Cadillac term loan, due 2025		2.5		3.9	LIBOR	plus	1.37	%
Piedmont term loan, due 2018		2.4		4.5	LIBOR	plus	3.50	%
Other short-term debt		0.2		0.1	5.50	% -	6.70	%
Total current maturities	$	15.8	$	20.0

⁽¹⁾

LIBOR cannot be less than 1.00%. On May 5, 2014 we entered into interest rate swap agreements to mitigate the exposure to changes in LIBOR for $199.0 million notional amount ($153.6 million at December 31, 2015) of the $600.0 million ($473.2 million at December 31, 2015) outstanding aggregate borrowings under our senior secured term loan facility. See Note 14, Accounting for derivative instruments and hedging activities for further details.

⁽²⁾

Excludes non-recourse debts of $164.9 million and $83.8 million from Meadow Creek term loan and Rockland term loan as of December 31, 2014, respectively. Both debts are resolved as part of our sale of the Wind Projects. See Note 3, Divestments.

Principal payments on the maturities of our debt due in the next five years and thereafter are as follows:


2016	$	15.8
2017		16.4
2018		68.3
2019		8.5
2020		7.6
Thereafter		616.7
	$	733.3

Senior Secured Credit Facilities

On February 24, 2014, Atlantic Power Limited Partnership (“the Partnership”), our wholly‑owned indirect subsidiary, entered into a new senior secured term loan facility (the “Term Loan Facility”), comprising of $600 million in aggregate principal amount, and a new senior secured revolving credit facility (the “Revolving Credit Facility”) with a capacity of $210 million (collectively, the “Senior Secured Credit Facilities”). Borrowings under the Senior Secured Credit Facilities are available in U.S. dollars and Canadian dollars and bear interest at a rate equal to the Adjusted Eurodollar Rate (LIBOR), the Base Rate or the Canadian Prime Rate, each as defined in the credit agreement governing the Senior Secured Credit Facilities (the “Credit Agreement”), as applicable, plus an applicable margin between 2.75% and 3.75% that varies depending on whether the loan is a Eurodollar Rate Loan, Base Rate Loan, or Canadian Prime Rate Loan. The applicable margin for term loans bearing interest at the Adjusted Eurodollar Rate and the Base Rate is 3.75% and 2.75% respectively and was 3.75% at December 31, 2015. The Adjusted Eurodollar Rate cannot be less than 1.00% (1.00% at December 31, 2015). As further described in Note 14, the Partnership entered into interest rate swap agreements on May 5, 2014 to mitigate the exposure to changes in the Adjusted Eurodollar Rate for a portion of the Term Loan Facility.

In connection with the funding of the Senior Secured Credit Facilities, we terminated our prior revolving credit facility on February 26, 2014.

The Term Loan Facility matures on February 24, 2021. The revolving commitments under the Revolving Credit Facility terminate on February 24, 2018. Letters of credit are available to be issued under the revolving commitments until 30 days prior to the Letter of Credit Expiration Date under, and as defined in, the Credit Agreement. The Partnership is required to pay a commitment fee with respect to the commitments under the Revolving Credit Facility equal to 0.75% times the average of the daily difference between the revolving commitments and all outstanding revolving loans (excluding swing line loans) plus amounts available to be drawn under letters of credit and all outstanding reimbursement obligations with respect to drawn letters of credit.

The Senior Secured Credit Facilities are secured by a pledge of the equity interests in the Partnership and its subsidiaries, guaranties from the Partnership subsidiary guarantors and a limited recourse guaranty from the entity that holds all of the Partnership equity, a pledge of certain material contracts and certain mortgages over material real estate rights, an assignment of all revenues, funds and accounts of the Partnership and its subsidiaries (subject to certain exceptions), and certain other assets. The Senior Secured Credit Facilities are not otherwise guaranteed or secured by us or any of our subsidiaries (other than the Partnership subsidiary guarantors). The Senior Secured Credit Facilities have a debt service reserve account, which is required to be funded and maintained at the debt service reserve requirement, equal to six months of debt service. The debt service reserve requirement was funded with a $15.8 million letter of credit.

The Partnership’s existing Cdn$210 million aggregate principal amount of 5.95% Medium Term Notes due June 23, 2036 (the “MTNs”) prohibit the Partnership (subject to certain exceptions) from granting liens on its assets (and those of its material subsidiaries) to secure indebtedness, unless the MTNs are secured equally and ratably with such other indebtedness. Accordingly, in connection with the execution of the Credit Agreement, the Partnership has granted an equal and ratable security interest in the collateral package securing the Senior Secured Credit Facilities under the indenture governing the MTNs for the benefit of the holders of the MTNs.

The Credit Agreement contains customary representations, warranties, terms and conditions, and covenants. The covenants include a requirement that the Partnership and its subsidiaries maintain a Leverage Ratio (as defined in the Credit Agreement) ranging from 5.25:1.00 in 2014 to 4.00:1.00 in 2021, and an Interest Coverage Ratio (as defined in the Credit Agreement) ranging from 2.50:1.00 in 2014 to 3.25:1.00 in 2021. In addition, the Credit Agreement includes customary restrictions and limitations on the Partnership’s and its subsidiaries’ ability to (i) incur additional indebtedness, (ii) grant liens on any of their assets, (iii) change their conduct of business or enter into mergers, consolidations, reorganizations, or certain other corporate transactions, (iv) dispose of assets, (v) modify material contractual obligations, (vi) enter into affiliate transactions, (vii) incur capital expenditures, and (viii) make dividend payments or other distributions, in each case subject to customary carve‑outs and exceptions and various thresholds.

Under the Credit Agreement, if a change of control (as defined in the Credit Agreement) occurs, unless the Partnership elects to make a voluntary prepayment of the term loans under the Senior Secured Credit Facilities, it will be required to offer each electing lender to prepay such lender’s term loans under the Senior Secured Credit Facilities at a price equal to 101% of par. In addition, in the event that the Partnership elects to repay, prepay or refinance all or any portion of the term loan facilities within one year from the initial funding date under the Credit Agreement, it will be required to do so at a price of 101% of the principal amount so repaid, prepaid or refinanced.

The Credit Agreement also contains a mandatory amortization feature and customary mandatory prepayment provisions, including: (i) from proceeds of assets sales, insurance proceeds, and incurrence of indebtedness, in each case subject to applicable thresholds and customary carve‑outs; and (ii) the payment of 50% of the excess cash flow, as defined in the Credit Agreement, of the Partnership and its subsidiaries.

Under certain conditions the lending commitments under the Credit Agreement may be terminated by the lenders and amounts outstanding under the Credit Agreement may be accelerated. Such events of default include failure to pay any principal, interest or other amounts when due, failure to comply with covenants, breach of representations or warranties in any material respect, non‑payment or acceleration of other material debt of the Partnership and its subsidiaries, bankruptcy, material judgments rendered against the Partnership or certain of its subsidiaries, certain ERISA or regulatory events, a change of control of the Partnership, or defaults under certain guaranties and collateral documents securing the Senior Secured Credit Facilities, in each case subject to various exceptions and notice, cure and grace periods.

On February 26, 2014, $600 million was drawn under the Term Loan Facility, and letters of credit in an aggregate face amount of $144.1 million ($104.0 million as of December 31, 2015) were issued (but not drawn) pursuant to the revolving commitments under the Revolving Credit Facility and used to (i) satisfy a debt service reserve requirement in an amount equivalent to six months of debt service (approximately $15.8 million) and (ii) support contractual credit support obligations of the Partnership and its subsidiaries and of certain other of our affiliates.

Notes of the Partnership

The Partnership, a wholly-owned subsidiary acquired on November 5, 2011, has outstanding Cdn$210.0 million ($151.7 million as of December 31, 2015) aggregate principal amount of 5.95% senior unsecured notes, due June 2036 (MTNs). Interest on the MTNs is payable semi-annually at 5.95%. Pursuant to the terms of the MTNs, we must meet certain financial and other covenants, including a financial covenant generally based on the ratio of debt to capitalization of the Partnership. The MTNs are guaranteed by Atlantic Power Corporation and Atlantic Power Preferred Equity Ltd., an indirect, wholly-owned subsidiary acquired in connection with the acquisition of the Partnership.

Non‑Recourse Debt

Project-level debt of our consolidated projects is secured by the respective project and its contracts with no other recourse to us. Project-level debt generally amortizes during the term of the respective revenue generating contracts of the projects. The loans have certain financial covenants that must be met in order to distribute available cash. At December 31, 2015, all of our projects, with the exception of Piedmont, were in compliance with the covenants contained in project-level debt. We do not expect our Piedmont project to meet its debt service coverage ratio covenants or to make distributions before the project’s debt maturity in 2018 at the earliest, due to continued operational issues that have resulted in higher forecasted maintenance and fuel expenses than initially expected.