Home >Companies >News >ReNew Power raises $450 million through dollar bonds
ReNew Power, with about 5.4GW of operational capacity of wind (60%) and solar (40%) power projects, and a project pipeline of 2.6GW, is one of the leading independent renewable power producers in the country. (Photo:  Bloomberg)
ReNew Power, with about 5.4GW of operational capacity of wind (60%) and solar (40%) power projects, and a project pipeline of 2.6GW, is one of the leading independent renewable power producers in the country. (Photo: Bloomberg)

ReNew Power raises $450 million through dollar bonds

  • Firm plans to use the funds to refinance the existing borrowings
  • Attractive yields and liquidity have driven investor interest in Indian companies

Sustainable energy firm ReNew Power Pvt. Ltd has raised $450 million through a dollar bond issuance, said D. Muthukumaran, the company’s chief financial officer.

“The firm’s order book of 3x for such a long tenor paper and high participation from investors across the US and Europe are very encouraging and reflective of the company’s prospects and its healthy leverage levels," he said.

The bonds, according to a person directly aware of the matter, were priced at a coupon rate of 5.875% and will be issued in two tranches with an average maturity of five-and-a-half years. “However, most funds will be raised through bonds that have seven years to maturity," he said on the condition of anonymity.

On 12 January, rating agency Fitch Ratings had rated the US dollar senior secured notes to be issued by the firm at BB-/Stable. ReNew plans to use the proceeds from the dollar notes to refinance existing borrowings, including trade credit facilities of the holding company. Part of the proceeds of nearly $65 million will also be used to meet future capital expenditure requirements.

“The funds are being borrowed mainly to refinance debt maturing in the coming year. This will help the company extend its loan tenure by seven years. On the whole, this will be a debt-neutral transaction as the firm’s overall leverage will not increase," said the person mentioned above.

The firm’s leverage ratio, or its net adjusted debt-to-operating Ebitda (earnings before interest depreciation and amortization) ratio, stood at over 5.5 times on a sustained basis, according to Fitch.

The firm, with about 5.4 gigawatt (GW) of operational capacity of wind (60%) and solar (40%) power projects, and a project pipeline of 2.6GW, is one of the leading independent renewable power producers in the country.

“Investors are increasingly funding clean energy-backed bonds in line with their environmental, social and governance mandates," said Kailash Vaswani, president, corporate finance, ReNew Power.

Attractive yields and liquidity have also driven investor interest in Indian companies, which raised more than $20 billion of debt through offshore bonds in 2019, the highest both in value and volume terms in the last six years. In 2019, 47 Indian companies raised $21.32 billion through offshore bonds, compared to a muted 2018, which witnessed only 12 companies tapping the offshore debt markets to raise $5.2 billion, according to data from financial markets tracker Refinitiv.

In January, several Indian firms tapped the dollar bond market to raise funds. This includes Future Retail Ltd, which raised $500 million via dollar-denominated bonds, which witnessed almost six times demand of the issue size, Mint reported on 14 January. Export-Import Bank of India (Exim Bank) raised $1 billion by issuing 10-year bonds and gold loan financier Manappuram Finance Ltd raised $300 million through three-year dollar bonds.

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