Adani Green Energy, which deferred its $1.2 billion, 20-year bond offering on current weak market conditions, plans to launch it after the US elections, sources said.
The company pulled back the launch of the issue at almost the last moment and reports attributed it to the uncertainties in the market prompting investors to ask for a bump up in the pricing.
Bloomberg said that Adani Green had reached the final price guidance and had set the yield at 7 per cent, which was not to the liking of some of the investors, who wanted a higher yield. Market sources said that in the runup to the US elections, investors were increasingly getting jittery especially with the volatility in rates in the US and a risk premium would be attached to bond issuances.
The deal will now be executed after the US elections on November 5. “It is expected to be lapped up by investors on account of its attractive credit highlights,” a source said.
On October 4 Adani Green Energy had informed the exchanges about the investor meetings for the forthcoming bond issuance.
The issuers were the company and its four subsidiaries and the arrangers to the issue were DBS Bank, Emirates NBD Bank PJSC, First Abu Dhabi Bank PJSC, ING Bank N.V., Singapore Branch, Intesa Sanpaolo S.p.A., London Branch, Mizuho Securities (Singapore) Pte., MUFG Securities Asia Limited Singapore Branch, SMBC Nikko Securities (Hong Kong) Limited, Société Générale and State Bank of India, London Branch.
The hybrid RG (restricted group) comprises 1840 MW operational wind, solar hybrid assets in Rajasthan with an investment grade rating from both Moody’s as well as Fitch Ratings.
“This is one of the strongest credits from the Indian renewables market,” the source said.
The proceeds of the issue will be used to repay the foreign currency loans of the subsidiaries.
Fitch has given Adani Green’s dollar notes offering, due 2044, first time ‘BBB-(EXP)’ rating with a Stable outlook. It said the rating was underpinned by long-term fixed-price power purchase agreements, commercially proven technology, experienced operations and maintenance (O&M) contractors, an adequate financial profile and structural protection, which mitigates refinancing risk. It added that noteholders would benefit from a standard security package and robust covenants restricting distributions.
Solar modules for the assets are provided by globally well-known suppliers such as LONGi Solar Technology and China-based Jinko Solar, while the wind turbines generators are from Siemens Gamesa Renewable Energy, S.A.U. and Suzlon Energy.
This is the second time that an Adani group company has pulled out of an issuance, after Adani Enterprises scrapped a Rs 20,000 crore follow-on equity offering in February 2023, though it was fully subscribed, following allegations by Hindenburg Research of corporate governance lapses and price manipulation.