New Delhi: SAEL group (the “Company”) has successfully issued 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 US$ 305 Mn (Approx INR 25,315 crores) green bond was jointly issued by SAEL Limited along with 5 wholly owned subsidiaries (together referred to as the “Restricted Group”). The Restricted Group comprises of 334 MW of renewable energy assets across solar and waste to energy. Notably, this is the first renewable energy issuance from India with waste-to-energy assets. The transaction was structured as a project-finance style security financing (including 100% share pledges and charge over all assets) with a cashflow waterfall mechanism. The bonds were issued at a yield of 7.80% for a tenor of 7 year (weighted average life of ~5.3 years) and are expected to be rated BB+ by Fitch. This transaction marks a major milestone in Company’s efforts to diversify its borrowing profile.
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, the Company engaged in a global roadshow to meet with institutional debt investors across Asia, Europe and the US over the past week. For the $305 million issue, the company witnessed large demand from high quality global investors. Despite the reduction in pricing by 32.5 bps from initial guidance, orderbooks continued to grow to over US$ 1.85 bn – 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. The deal attracted high-quality demand, with 88% of funds 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” ( highest category). Proceeds are expected to be used for refinancing existing debt at the Restricted Group and fund capex of future renewable projects of the Company.
“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. Backed by marquee partners 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 next 2 years” said Varun Gupta, Chief Investment Officer of SAEL
