UNITED KINGDOM: Details emerge on Drax GBP 1.08bn bridge facility for Bluefield yieldco acquisition

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Drax Group has put in place a GBP 1.08bn syndicated bridge financing facility to support its acquisition of Bluefield Solar Income Fund (BSIF), with the total debt package closely matching the transaction’s enterprise value.

The term loan facility is being provided by a three-bank syndicate comprising Santander, JP Morgan and NatWest, each underwriting an equal share of the financing, according to documents published this week.

Under the structure, each lender is committing approximately GBP 360.9m across two tranches.

The first tranche totals GBP 576.5m, with each bank committing GBP 192.2m, while the second tranche amounts to GBP 506.2m, with individual commitments of GBP 168.7m from each lender.

Together, the two tranches replicate the transaction’s reported enterprise value of approximately GBP 1.08bn, indicating that the acquisition is being fully financed on a bridge basis at closing.

Santander is acting as facility agent, with all three banks serving as mandated lead arrangers on the transaction.

The borrower under the facility is Drax Corporate Limited, with guarantees provided by Drax Group Holdings Limited and a wider group of subsidiaries, pointing to a corporate-level leverage structure rather than project financing.

The documentation confirms that the facility has been structured specifically to fund the acquisition of BSIF shares, together with related transaction costs.

Funding availability is directly linked to completion mechanics, with drawdown conditional on the transaction proceeding via a court-sanctioned scheme of arrangement or takeover offer, in line with UK takeover rules, and allowing flexibility to switch between structures if required.

The bridge facility is expected to be refinanced with a longer-term arrangement in the near future.

The facility documentation differentiates acquisition costs from refinancing costs, reinforcing expectations that a subsequent refinancing will be undertaken once the acquisition has closed and assets have been integrated.

Drax’s purchase of BSIF is the result of a formal sale process launched in November 2025, with completion expected in Q3 2026.