The shares of FuelCell Energy (FCEL -4.04%) are going to have quite a week, if their performance on Monday is any indication. The company's stock zoomed nearly 7% higher on Monday thanks to a new financing deal. That rate easily bettered the 0.3% increase of the S&P 500 index that day.
New funds incoming
FuelCell announced that it has agreed to a deal in which two local lenders will provide debt financing for a pair of the company's fuel cell projects. Of the $13 million that is being supplied, Liberty Bank's senior credit facility is to provide $6.5 million and Connecticut Green Bank $3 million in a subordinated facility. The latter company will also contribute an additional credit facility totaling $3.5 million.
The term of the Liberty Bank facility is seven years, FuelCell added, while that of Connecticut Green Bank's subordinated financing is 14 years. Their respective interest rates are fixed at 7.25% and 8%. The monies available to the borrower totaled roughly $11.6 million once transaction fees and debt service reserves were accounted for.
The funds will be used in the continuing development of a 14-megawatt fuel cell park and a 2.8-megawatt fuel cell project, both of which are located in the town of Derby, Connecticut. This is within driving distance of FuelCell's headquarters in the city of Danbury.
Effective, inexpensive, and useful
In the press release trumpeting the new debt facilities, FuelCell quoted its CFO Michael Bishop as saying that the banks' "efficient and cost-effective financing... highlights their continued confidence they have in the long-term performance of our fuel cell platforms."
