Atlantic Power Acquires Capital Power Income For $1.1B, Closes Equity And High Yield Note Offerings And Amends And Restates Its Revolving Credit Facility

Atlantic Power Corporation (“Atlantic Power”), pursuant to a plan of arrangement under the Canada Business Corpora-tions Act, acquired all of the outstanding partnership units of Capital Power Income L.P. (“CPILP”) held by unitholders of CPILP other than Capital Power Corporation (“CPC”) and acquired from EPCOR Utilities Inc. and CPC all of the shares of CPI Investments Inc., a corporation that owned approximately 29 per cent of the outstanding units of CPILP. Each partnership unit was acquired for $19.40 in cash or 1.3 Atlantic Power common shares, resulting in an aggregate purchase price of approximately $1.1 billion which was satisfied by the payment of $506.5 million of cash and the issuance by Atlantic Power of approximately 31.5 million common shares. The transaction closed on November 5, 2011. In connection with the closing of the acquisition, CPILP sold its two North Carolina biomass plants to CPC for approximately $121 million.

The cash portion of the purchase price was financed by an equity offering of $168 million and a high yield note offering of US$460 million. On October 19, 2011, Atlantic Power completed a public offering of 12,650,000 common shares of Atlantic Power that included 1,650,000 common shares issued pursuant to the exercise in full of the underwriters' over-allotment option at a purchase price of US$13.00 or $13.26 per common share for aggregate gross proceeds of approximate-ly $168 million. The underwriting syndicate included TD Securities Inc., Morgan Stanley & Co. LLC, BMO Nesbitt Burns Inc., Desjardins Securities Inc., Scotia Capital Inc. and Macquarie Capital Markets Canada Ltd. On November 4, 2011, At-lantic Power completed a private placement of US$460 million of its 9 per cent senior notes due 2018. Morgan Stanley & Co. LLC, TD Securities (USA) LLC and Macquarie Capital (USA) Inc. acted as the lead agents.

In connection with the closing, Atlantic Power entered into an amended and restated senior secured credit agreement with Bank of Montreal, Union Bank, Toronto Dominion and Morgan Stanley, pursuant to which Atlantic Power increased its capacity under its existing credit facility from US$100 million to US$300 million on a senior secured basis.

As a result of this transaction, Atlantic Power has nearly doubled its market capitalization and assets, expanded its operations into Canada with a 143 per cent increase in power generation capacity to 2,116 MW and has brought an operating platform through the transfer of CPC operating employees to Atlantic. The combined portfolio of assets consists of interests in 30 operational power generation projects across 11 states and two provinces, one 53 MW biomass project under construction in Georgia, and an 84-mile, 500-kilovolt electric transmission line located in California. Atlantic Power also owns a majority interest in Rollcast Energy, a biomass power plant developer with several projects under development. Atlantic Power is incorporated in British Columbia, headquartered in Boston, and as a result of the acquisition of CPILP, has added offices in Chicago, Toronto, and Richmond, BC.

With respect to the acquisition, Atlantic Power was represented by lead counsel Goodmans LLP with a team led by Bill Gorman that included Bob Vaux, Gesta Abols, Kirk Rauliuk, Brian Savage, Geoff Cowper-Smith, Lauren McLeod (corporate/M&A); Jon Northup, David Veneziano and Mark Tozer (tax); Dan Gormley (energy/M&A); Peter Ruby and Danny Cappe (energy/regulatory); Ira Barkin and Andrea Fellows (real estate); Jana Steele (pensions); Michelle Dobranowski (employment & labour); Joel Schachter (Investment Canada); Richard Annan (competition) and Jason Wadden (litigation); and in the US by Leonard, Street and Deinard Professional Association with a team that included Tammie Ptacek, Jonathan Gottlieb and Brad Gillan (banking and lending) and David Ezrilov (corporate); and by Goodwin Procter LLP with a team that included Laura Hodges Taylor, Yoel Kranz, Lee Giguere and Qing Nian (corporate/M&A) and Mark Kirshenbaum and Todd Gluth (tax).

CPILP (by its manager) was represented in Canada by Fraser Milner Casgrain LLP with a team that included Bill Gilliland, Toby Allan and Felicia Bortolussi (corporate/M&A); Stephanie Campbell (banking); Helen Newland, Vivek Bakshi and Ron Stuber (energy); Anne Calverley (tax); Joe Hunder (employment); Mary Picard and Mark Dunsmuir (pensions); Andrew Salem (real estate); Sandy Walker (Investment Canada and Competition) and Brian Foster (litigation); and in the US by K&L Gates LLP with a team that included Eric Freedman (energy/M&A); Kristy Harlan and Holly Vanc(corporate/securities); Irene Song, Jessica Jackson, Brianne Anderson, Eugene Hwang and Mariah Kennedy (corporate/M&A); Elizabeth Thomas, Brian Knox, Stanford Baird, David Naidu and Mary Kenny (environmental); Lisa Tucker, Harvey Spigal, Carl Fink, Andrew Young, Will Keyser, Molly Suda and Megan Vetula (energy regulatory); Brian McCalmon and Ken Knox (antitrust and Hart-Scott-Rodino); Marty Stern and Brad Currier (telecommunications regulatory); Diane Stokke, Frank Stearns and Nadya Makenko (real estate); Robert Brown and Stephanie Pickett (labour and employment); Doug Love and Karrie Diaz (employee benefits) and Andrew Zuccotti and Won-Han Cheng (tax). CPILP was represented by Norton Rose OR LLP (now Norton Rose Canada LLP) with a team that included Crispin Arthur and Matthew Hall (corporate/M&A) and by Richard Shaw, QC, of Richard A. Shaw Professional Corporation.

With respect to the equity offering, Atlantic Power was represented by Goodmans LLP with a team led by Bill Gorman that included Kirk Rauliuk and Brian Savage (corporate/securities) and Jon Northup and David Veneziano (tax); and in the US by Goodwin Procter LLP with a team that included Laura Hodges-Taylor, Yoel Kranz, Catherine Pan and Qing Nian (corporate/securities).

The underwriters were represented in Canada by Blake, Cassels & Graydon LLP with a team that included Jeffrey Lloyd, Brendan Reay and Michael Hickey (corporate/securities) and Ron Richler and Edward Miller (tax); and in the US by Paul, Weiss, Rifkind, Wharton & Garrison LLP with a team that included Christopher Cummings, Piibe Jogi, Ari Lazarus and Philippe Savard (corporate/securities); William O'Brien (environmental law) and David Mayo (tax).

With respect to the high yield note offering, Atlantic Power was represented in the US by Goodwin Procter LLP with a team that included James Barri, Milena Tantcheva, Lee Giguere, Heejin Yi and Achal Oza (corporate/securities); and in Canada by Goodmans LLP with a team that included Bill Gorman, Caroline Wang, Brian Savage and Emily Ting (corpo-rate/securities); Mark Surchin (banking) and David Veneziano (tax).

The agents were represented in the US by Cahill Gordon & Reindel LLP with a team that included William Miller, Sean Tierney, Colin Addy, Jake Keaveny and Deborah Weiner (corporate/securities); and in Canada by Osler, Hoskin & Harcourt LLP with a team that included Michael Matheson and Andrew Herr (banking) and Desmond Lee (corpo-rate/securities).

With respect to the credit facility, Atlantic Power was represented in the US by White & Case LLP with a team that included David Joyce, Ayesha Farooqi, Sylvie Goursaud and David Medlar (banking); and by Leonard, Street and Deinard Professional Association with a team that included Tammie Ptacek and Brad Gillan (banking and lending); and in Canada by Goodmans LLP with a team that included David Nadler, Mark Surchin, Caroline Wang and Emily Ting (banking).

The Bank of Montreal as administrative agent for the lenders was represented in the US by Dorsey & Whitney LLP with a team that included Peter Nelson, Betsy Parker and Erik Detlefsen (banking); Jonathan Van Horn (corporate) and Joseph Hall (regulatory); and in Canada by McCarthy Tétrault LLP with a team that included Stephen Furlan, Ana Badour and Emily Ng (banking).

Lawyer(s)

Gesta A. Abols Laura Hodges Taylor Stephen Furlan Mary M. Picard Ira S. Barkin Edward Miller Matthew J. Hall Ronald M. Richler Andrea Fellows Desmond Soye Christopher J. Cummings Daniel Cappe Joseph Hunder Jason Wadden Daniel Gormley Joel S. Schachter Mark D. Kirshenbaum Crispin J. Arthur Andrew G. Herr Brendan D. Reay Andrew H. Zuccotti Yoel Kranz David J. Nadler Geoff Cowper-Smith Bill Gorman Frank Stearns Caroline C.H. Wang Vivek Bakshi Jon Northup Jana Rae Steele Jonathon A. Van Horn Peter D. Ruby David Joyce Brian Savage Michelle Dobranowski Brian McCalmon Anne Calverley Jonathan Gottlieb Mark Tozer Helen T. Newland Felicia B. Bortolussi Richard Annan Michael D. Matheson Ron Stuber Kenneth Knox Mark Surchin Stephanie Campbell David Veneziano Kirk Rauliuk

Firm(s)

Goodmans LLP Leonard, Street and Deinard Dentons Canada LLP Goodwin Procter LLP K & L Gates LLP Norton Rose Fulbright Canada LLP Blake, Cassels & Graydon LLP Paul, Weiss, Rifkind, Wharton & Garrison LLP Cahill Gordon & Reindel LLP Osler, Hoskin & Harcourt LLP White & Case LLP Dorsey & Whitney LLP McCarthy Tétrault LLP