SAEL group announced this week that it had completed the issue of its debut US dollar-denominated bonds in the international markets. This bond marks the group’s first issuance in the international capital markets, providing the company access to a deep, alternative pool of liquidity to complement funds available through domestic Indian lenders.
The $305 million green bond was jointly issued by SAEL Ltd along with five wholly owned subsidiaries (together referred to as the “Restricted Group”). The Restricted Group comprises 334 MW of renewable energy assets across solar and waste to energy.
Backed by investors such as Norfund and DFC, SAEL is the largest operator of waste-to-energy assets in India and along with its solar capacity, it expects to expand its portfolio to 5 GW in the next two years. The company intends to use the proceeds for refinancing existing debt at the Restricted Group and fund capex of future renewable projects.
The bonds were issued at a yield of 7.80% for a tenor of seven year (weighted average life of 5.3 years) and are expected to be rated BB+ by Fitch.
Laxit Awla, chief executive officer, SAEL said, “This is an excellent outcome for us, as this has established our international capital market presence. We will continue to strengthen our position in capital markets with strong execution and operational performance.”
For this strategic fund-raising effort, SAEL engaged in a global roadshow to meet with institutional debt investors across Asia, Europe and the US. For the $305 million issue, the company witnessed large demand from high quality global investors. Despite the reduction in pricing by 32.5 bps from initial guidance, orderbooks continued to grow to over $1.85 billion—implying an oversubscription of greater than six times.
A total of 139 investors participated in the final issuance, with 61% of the funds raised from Asia, 20% from EMEA and 19% from the US. 88% of funds were raised from asset managers, 7% from insurance companies and pension funds, and remaining 5% across other investors such as financial institutions / banks etc.
This was a green bond issuance with a second party opinion from sustainable Fitch, which rated the framework as “excellent.”
“The record orderbook oversubscription for SAEL’s debut issuance by more than 6x reaffirms the faith of investors in SAEL’s business model and the opportunities presented by renewable industry,” said Varun Gupta, chief investment officer of SAEL.
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