David Burton Quoted in Power Finance & Risk on Yieldcos
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Akin Gump tax partner David Burton is quoted in Power Finance & Risk discussing the changing landscape of yieldcos.
The article reports that yield companies are slated to alter the power M&A market as they take advantage of their access to relatively low-cost capital. A potential increase in interest rates, however, could change all that. Burton says, “Shareholders may no longer find the 2.175 percent yield attractive if Treasuries go up to 5 percent, so there’s an inherent interest rate risk.”
A yieldco is a publicly traded company that is formed to own operating assets that produce a predictable cash flow. Burton discussed yieldcos as a trend for private equity developers in a May 2014 article for North American Windpower, “How Wind Developers Raise Equity in Public Markets.” That article is available by clicking here.