ReNew Power raises USD 300 million selling bonds overseas

ReNew Power has reportedly raised USD 300 million by selling bonds overseas. The company will use the proceeds for capacity expansion.

The sale of these bonds, with three-year maturity, opened for subscription on Thursday. According to ET the dollar-denominated securities were priced at 6.45%, the initial target rate. It is said to have obtained subscriptions upto $600 million.

A senior executive involved in the fundraising exercise speaking to publication said “A part of the proceeds may also be used for repaying existing high cost debt.”

The company has been planning this issuance the past few weeks.

Those bonds are known as 144A in market parlance, which allows US-based investors to buy them.

The publication notes that HSBC, JP Morgan, and Barclays are some of the banks that helped the company raise the money. This was the third series of overseas bond sales by the company.

Institutional investors across Asia, Europe and the US invested in the paper. Moody’s had assigned first-time Ba2 corporate family rating to ReNew Power Limited, compared with Ba3 in June, which are below the investment grade.

“Stability in ReNew Power’s operating cash flow also benefits from the geographic diversification in its generation fleet, which reduces its exposure to potential fluctuations in availability of wind and solar resources,” Moody’s said in a report.

During the fiscal year ended March 2019, output from the company’s portfolio of generation assets has performed broadly in line with Moody’s base-case expectations.

“(The company’s) strengthening credit profile also recognizes its strong track record in project execution, having successfully increased the operating capacity of its fleet to 4.5GW in March 2019 from around 1.0GW in April 2016,” the rating company said.

As of June 2019, it had total capacity of over 8 GW of wind and solar power assets across the country, including commissioned and under-development projects.

ReNew Power is developing another 3.0GW of new projects, which are likely to be commissioned by March 2021.