MUMBAI: India’s leading renewable energy producer ReNew Power is eyeing another issuance of dollar bonds, aiming to refinance its debt of around 803 megawatts (MW) of operating wind and solar assets.
This follows a $460 million issuance in February. In October, ReNew Power raised $325 million, selling bonds to foreign investors. ReNew is one of the most active dollar bond issuers from India.
“While the company has the approval to raise up to $620 million, the proposed bond issuance will be in the range of $575-600 million," said a person aware of the company’s plans.
The bond issuance comes at a time when the Goldman Sachs-backed green energy firm has announced a merger agreement with RMG Acquisition Corp. II (RMG II), a Nasdaq-listed special purpose acquisition company (SPAC), which will eventually see the company list on the Nasdaq stock exchange.
The transaction puts an enterprise value of around $8 billion on ReNew Power, and is expected to close in the second quarter of this year.
On Tuesday, Moody's Investors Service assigned a Ba3 rating to the proposed 7.25-year US dollar senior secured notes to be issued by a newly formed restricted group (RG5) of ReNew Power. Formed specifically to facilitate the proposed USD notes, the restricted group comprises 10 wholly-owned restricted subsidiaries, the rating agency said in a note. The restricted subsidiaries collectively have a capacity of 803 MW of wind and solar power plants, all of which are operational.
The proceeds from the bond issuance will be used to repay the outstanding external debt issued by the restricted subsidiaries.
"The Ba3 rating on the proposed notes reflects the underlying credit quality of RG5, as well as the parent guarantee provided by ReNew Power RG5's payment obligations for the USD notes," said Spencer Ng, a Moody's Vice President and Senior Analyst.
Over 96% of the restricted group's capacity is contracted under long-term power purchase agreements (PPAs) that span at least another 19 years, while the balance of the restricted group's capacity, a 28 MW project, is contracted with Maharashtra State Electricity Distribution Co. Ltd
"ReNew's ability to support RG5 will benefit from the net proceeds it will receive upon completion of its recently announced equity listing, as well as from its improved access to equity from a broader investor base going forward. These improvements should give ReNew more funding flexibility for its capital expansion and enhance its ability to preserve credit metrics supportive of its credit profile," said Moody’s Ng.
An email sent to ReNew Power did not elicit a response.
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