Renewable energy companies in India target local refinancing of rupee market maturing US dollar bonds. This is particularly after Renew Energy Global raised amortising project debt from the local market. The refinancing could redeem notes for as much as $525m at a lower cost to obtain offshore. Based on DCM bankers, Renew Energy Global got a credit facility from the state-owned firm, REC. It is actually the stepping stone for Indian renewable firms able to leverage rupees to end US dollar bond obligations.
A head of DCM even noted that this transaction is actually fabulous. In the bloc, issuers are struggling to refinance the future maturities. Renew Energy Global in this opportunity exercised a call option available in March to purchase 6.67% bonds outstanding. The due of this bond would be in 2024 with the cash price at 103.3. Meanwhile, there is a fixed interest rate for three years in the local refinancing. This is also pushing the maturity for the fiscal year ending in 2027.
However, there is no specific date announcement for Renew Energy Global for the maturity as well as the interest rate. The company has somehow announced that they had saved the 200bp in rupee terms along with the transaction. The issuer has increased the rupee loan around 9% per annum versus paying an all-in cost near 11%. This is to refinance the existing bonds.
A head of Asia Pacific infrastructure and project finance ratings at Fitch, Sajal Kishore, argues that more renewable companies are exploring the rupee loan structure. Especially, it is needing actual cost savings for the issuer.
