First Wind warns of possible loan default

First Wind Holdings LLC, which has developed wind farms in Hawaii, Maine and New York, is in the throes of a credit squeeze.

First Wind has plans for an initial public offering. But raising capital in the public market might be a tough go. The debt crisis in Greece has reignited credit concerns worldwide.

In its latest Securities and Exchange Commission filing, the Boston-based company reiterated it could default on an $80 million loan due next month. First Wind currently is negotiating with a consortium of banks to receive $240 million in financing that would pay off a turbine loan that matures June 30.

First Wind said it has signed a commitment letter for $240 million in financing, but the deal has not been finalized.

“However, there can be no assurance that this financing will close,” First Wind said in a Friday SEC filing. “If the company is unable to repay or further extend the maturity of the $79.9 million non-recourse turbine supply loan, it would be in default of this loan, and the lender could accelerate the remaining balance of $53.1 million due in 2011.”

The company was not immediately available for further comment.

Meanwhile, First Wind is exploring a number of options to restructure a debt load that was approaching $500 million at the end of March. The long-term portion of its debt was $390.5 million at the end of the first quarter. The current portion was $103.7 million, according to the company’s latest financial statements.

Other options for First Wind include a private placement sale of equity and extending the maturities of its debt.

In the SEC filing, First Wind again cautioned that raising additional capital and generating sufficient cash flow from operations are essential to its financial health.

If unable to do those two things, First Wind said it could be in default of its lending agreements and could be required to delay development and construction of its wind energy projects.

Furthermore, it could be forced to reduce the scope of its projects or abandon or sell some or all of its development projects.

“... All of which could adversely affect the company’s business, financial position and results of operations,” First Wind said in the filing.

First Wind’s projects come with heavy up-front capital costs. In the first quarter, the company’s net loss more than doubled to $10.6 million, compared with a net loss of $3.5 million in the year-ago period.

The company also continues to operate with a working capital deficit. In the first quarter, for example, First Wind reported total current assets of $135 million, compared with current liabilities of $181 million.

Over the past 18 months, though, First Wind has proved adept at accessing capital. Since the beginning of 2009, the company said it has refinanced, raised or received about $2 billion for First Wind and its projects.

The company’s investors include Chicago-based private equity firm Madison Dearborn Capital Partners and hedge fund heavyweight D.E. Shaw.

The credit crisis and recession, however, have curbed capital raising, even for the stars of the industry.

Earlier this month, the Wall Street Journal reported that it took Madison Dearborn 28 months to close its latest fund. The fund closed on $4.1 billion, but that was way off its target of $10 billion that was set before the credit crisis, the Wall Street Journal said.

Limited partners, such as big public pension funds, are still licking their wounds from steep declines in the stock market.