ReNew Power raises $325 million through foreign bond issue

ReNew Power has raised about $325 million through an overseas green bond sale as the company aimed to repay high-cost local debt and expand capacity. Reportedly, the bonds were initially planned to offer 5.875 per cent with a three-and-a-half-year maturity but were finally priced at about 5.375 per cent, the tightest yield the company has ever attained. The reason for taking the overseas SPV route is the cap on bond pricing set by the Reserve Bank of India which allows local companies to raise overseas credit at a spread of up to 450 basis points. Moody’s Investors Service had assigned a Ba3 rating to the bonds, which were issued by India Green Energy Holdings, a financing entity set up for the fundraise. India Green will use the proceeds from the dollar bonds to subscribe to seven-year non-convertible debentures (NCDs) to be issued by 11 restricted subsidiaries, which are either wholly owned or majority-owned subsidiaries of ReNew Power. These subsidiaries hold solar and wind projects of over 400 MW capacity. The proceeds from the NCDs will be used by the restricted subsidiaries to refinance existing debt, pay related transaction costs and fund a Rs 7.5 billion loan (approximately $100 million) to ReNew Power.