Rating agency Fitch has given a ‘BB-’ to ReNew’s proposed issue.

Mumbai: Wind and solar energy company Renew Power is meeting investors this week as it plans to raise at least $300million via dollar bond sales across the world later this month. The money raised will be used to refinance existing debt and for funding the second tranche of projects the company has bid for under the government planned Solar Energy Corp of India (SECI)’s second tranche of green energy projects, people familiar with the issue said.

“The roadshows for this bond will start on Tuesday. Bankers and company officials are going to meet investors all through this week. If all goes to expectations the issue will price as early as next week. It is a fixed price issue,” said a person cited above. HSBC and Barclays are bankers to the issue.

The Sumant Sinha-founded company has been a regular in the dollar bond market with the last issue as recently as September 2019 when it raised $300 million through a similar issue to overseas investors. That issue priced at 6.45 percent. Bank- ers are hoping that this issue will be priced at a lower yield. “This issue has two maturities one at just above three years and the other at just above seven years which means that the average maturity after amortisation comes to about five years. The money raised will be used predominantly for refinancing and some of it will be used for investments,” said a second person.


Rating agency Fitch has given a ‘BB-’ to ReNew’s proposed issue. These bonds will have direct security of a 250 MW wind-power operating project along with some shares of subsidiary company Re-New Power Services. This issue also includes a $20 million interest service reserve account, which will act as a security for repayment in case sufficient cash flow is not generated to service the debt.

In a note accompanying the rating, Fitch said the company’s lower than investment grade rating reflects the weak credit profile of Re-New’s counterparties—state-owned power-distribution utilities.

State-owned power-distribution utilities account for about 60 percent of group total capacity, including projects under development. Around 36 percent of the off-take is tied up with sovereign-backed entities: SECI with 31 percent, NTPC with 2 percent, and PTC India with 3 percent, which have more timely payment records.

News Source: The Economic Times

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