Friday, April 1, 2011

Clean Energy Subsidiary Announces Pricing of $40.2 Million Bond Issuance

Clean_Energy_logoDallas Clean Energy McCommas Bluff, LLC, a subsidiary owned 70% by Clean Energy Fuels Corp., has arranged for a $40.2 million tax-exempt bond issuance led by Senior Managing Underwriter FirstSouthwest Company. The bonds will be repaid from the revenue generated by Dallas Clean Energy McCommas Bluff, LLC (“Dallas Clean Energy”) from the sale of renewable natural gas (or biomethane). The bond obligations are secured by the revenue and assets of Dallas Clean Energy and are non-recourse to Dallas Clean Energy’s parent companies including Clean Energy Fuels Corp.

The bond proceeds will primarily be used to finance further improvements and expansion of the landfill gas processing facility owned by Dallas Clean Energy at the McCommas Bluff landfill outside of Dallas Texas. A portion of the proceeds will be used to retire an approximately $11.4 million Clean Energy bridge loan.

The bond repayments are amortized through December 2024 and the average coupon interest rate on the bonds is 6.596%. The bond issuance is expected to close March 31, 2011.

“This financing provides funds for the highly successful biomethane facility owned and operated by our Dallas Clean Energy subsidiary and will enable the plant to increase production,” said Andrew J. Littlefair, Clean Energy President and CEO. “McCommas Bluff is the first facility in our new Renewable Fuels initiative and now produces more than nine million gasoline gallon equivalents of renewable biomethane annually.”

While natural gas is 23% cleaner in carbon emissions than diesel in heavy-duty vehicles — and far cleaner in NOX and PM emissions — biomethane enables an 88% reduction in carbon emissions when displacing diesel or gasoline.

The McCommas Bluff landfill — the third largest landfill gas operation in the United States, opened in 1975 and is scheduled to close in 2042. It is estimated that pipeline quality biomethane gas will continue to be produced for approximately 30 years after the landfill closes. The plant is currently capable of processing 9.4 million cubic feet a day of landfill gas into approximately 36,000 gasoline gallon equivalents of pipeline quality biomethane. Dallas Clean Energy plans to increase this capacity to approximately 14.9 million cubic feet a day and make further improvements that should enable the production of approximately 60,000 gasoline gallon equivalents a day of pipeline quality biomethane.

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