(By Balachander) Atlantic Power Corp. (NYSE: AT) (TSE: ATP) shares were upgraded to "sector performer" from "sector underperformer" by CIBC World Markets Inc.
The brokerage reduced price target for Atlantic Power to C$12.50 from C$13.00 based on its discounted cash flow.
Atlantic Power completed its $88 million (plus assumption of debt) Ridgeline acquisition, adding 150 net MW of operating capacity and extending the average remaining PPA life of its asset portfolio to around 10 years, CIBC noted.
The equity requirements were financed through a C$100 million debenture offering.
CIBC said Ridgeline assets also include 1,000 MW of development projects (wind/solar), an attribute that was previously lacking to Atlantic Power. Management expects to receive a $55 million U.S. stimulus grant in Q1/F13 in association with the newly commissioned/acquired Meadow Creek project.
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Canadian Hills achieved commercial operation in Q4/F12 qualifying the project to receive U.S. federal production tax credits. In aggregate, Atlantic secured $272 million in tax equity investment ($47 million to be syndicated in Q1/F13) to use to repay the project's construction loan, the brokerage noted.
Shares fell 3.21 percent to trade at $11.47 on the Toronto Stock Exchange on Thursday. On the NYSE, shares lost 4.07 percent.