ReNew Power Raises $475 m to Re­fi­nance Debt via Green Bonds

The Economic Times - - Finance & Commodities - Saikat.Das1@ times­group.com

Mum­bai: ReNew Power Ven­tures has raised $475 mil­lion by sell­ing green bonds to over­seas in­vestors as the so­lar and wind en­ergy pro­ducer plans to re­fi­nance debt.

The bond yielded 6% at the close of sub­scrip­tion on Mon­day. The yield was about 38 ba­sis points tighter than the ini­tial guid­ance, a move that will help the clean en­ergy com­pany save bor­row­ing costs.

“We will use the pro­ceeds to re­fi­nance our ex­ist­ing debt,” Ravi Seth, CFO of ReNew Power Ven­tures, told ET, con­firm­ing the mat­ter. “We are cur­rently run­ning 13 green projects. We have planned to re­fi­nance the debt in­volved in those projects.” Funds raised through green bonds are man­dated to be de­ployed in clean en­ergy projects. Bank of Amer­ica Mer­rill Lynch, JP Mor­gan and HSBC were some of the bankers that ar­ranged the deal.

“This trans­ac­tion demon­strates the qual­ity of the as­sets and also in­di­cates the ris­ing con­fi­dence in­vestors have in green bonds,” said Gau­rav Sing­hal, di­rec­tor – in­vest­ment banking, Bank of Amer­ica Mer­rill Lynch. “The fund-rais­ing will help the com­pany di­ver­sify its bor­row­ing re­sources by tap­ping into one of the deep­est pools of cap­i­tal.”

The bonds are priced after adding a mark-up over and above the five-year US Trea­sury bonds, which now yield 1.88%. The se­cu­ri­ties will be listed on the Sin­ga­pore Stock Ex­change.

In­sti­tu­tional in­vestors across Asia, Europe and the US in­vested in the pa­per, known as Reg­u­la­tion S 144A in mar­ket par­lance. Global rat­ing com­pa­nies Moody’s In­vestors Ser­vice and Fitch clas­si­fied the bonds as Ba3 and B+, about three notches lower than in­vest­ment grade (BBB-). ReNew Power owns wind and so­lar power gen­er­at­ing as­sets lo­cated in Andhra Pradesh, Gu­jarat, Jhark­hand, Kar­nataka, Mad­hya Pradesh and Te­lan­gana.

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