Monday, August 07, 2017

Goldman Sachs’s ‘Secret’ SunEdison Loan at Center of KKR Suit

First Wind

In January 2015, Goldman, Morgan Stanley and Deutsche Bank were among five lenders on a margin loan to SunEdison. The $410 million, two-year deal was intended to help fund the $2.4 billion purchase of renewable-energy developer First Wind Holdings, and Goldman was a financial adviser, according to the lawsuits.

While many details about the margin loan were disclosed, a side letter agreement that defined its exact triggers wasn’t, Pyramid said. The TerraForm Power shares pledged to back the loan traded at $32.58 a share when the loan was entered, and had to decline 23 percent before a trigger was exceeded, according to its lawsuit.

The underwriters say enough was disclosed to anticipate when a margin call might be triggered, and that SunEdison didn’t need to give “each and every term” of the loan so investors could know its exact timing or size.

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