Adani Green Energy is back to tap the overseas bond market with a 20-year, $1.5 billion bond offer, to which Fitch Ratings has assigned ‘BBB- (EXP) ‘, with a stable outlook.

The proposed, partially amortised senior secured notes due 2044 is for the company’s 1140 MW portfolio of solar and hybrid power projects.

The company had originally planned to raise $1.2 billion last month but had withdrawn it due to uncertainties in the US dollar markets then with the intent to launch the offering post the US elections.

Prospective investors had sought a higher yield at that time.

The company is expected to raise around $500-600 million in the immediate term. In April, businessline had reported that the company intended to raise $4-4.5 billion in overseas dollar bonds over the next 3-4 years to fund its expansion and reach its revised target of 50 GW renewable energy capacity by 2030.

Fitch said the expected rating reflected the credit profile of AGEL Hybrid RG1, which operates wind and solar hybrid assets in Rajasthan.

“The rating is underpinned by long-term fixed-price power purchase agreements (PPAs) with sovereign-backed Solar Energy Corporation of India (SECI), commercially proven technology, experienced operations and maintenance (O&M) contractors, an adequate financial profile and structural protection, which mitigates refinancing risk,” it said.

Noteholders would benefit from a standard security package and robust covenants restricting distributions, it pointed out.

The restricted group generates an average annual debt service coverage ratio of 1.35x, with a minimum of 1.27x under Fitch’s rating case. It said the financial profile was stronger than was commensurate with a ‘BBB-’ rating, with considerable rating headroom.

The rating agency said it regarded revenue from SECI as fully contracted revenue and applied the fully contracted project threshold.

The proposed notes will partially amortise, with a 10.2 per cent bullet at maturity in 2044. Refinancing risk is fully mitigated by about 90 per cent scheduled amortisation over 20 years and restrictive covenants that mandate cash reserves. “These are adequate to repay all debt outstanding at maturity,” Fitch said.

Distributions are prohibited from the 18th year unless the senior debt restricted reserve is fully funded to repay the bullet plus any accrued and unpaid interest. Refinancing covenant and sufficient operating cash flow after maturity provide an additional cushion.

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