20211206-招银国际-Greenko_Energy_Holdings__GRNKEN__New_Issue_3页_421kb

CMBI Credit Commentary Summary: Greenko Energy Holdings (GRNKEN) New Issue

Core Content

This document provides a credit commentary on the proposed USD 980 million issuance of 7NC3 amortizing senior secured "green" bonds by Greenko Power II Ltd (GRNKEN), a subsidiary of Greenko Energy Holdings. The bonds are expected to be rated Ba1/BB+ by Moody's and Fitch and will be offered in RegS/144A format. The proceeds from the bond issue are intended to repay existing domestic debts of the restricted subsidiaries and cover issuance expenses.

Key Information

• Bond Details:

  • Issue amount: USD 980 million
  • Coupon rate: 7NC3 (likely 7% coupon with 3 years of deferral)
  • Weighted average life (WAL): 5.6 years
  • Amortization structure: 19.5% of the bond principal over the life of the bonds, with an annual amortization rate of 3% (USD29.4 million) and a voluntary cash sweep of 26.75% of the principal amount.

• Fair Value Estimate:

  • The fair value (FV) for the proposed GRNKEN 28 is estimated between 4.0% and 4.25%.
  • This is derived by adding 25-40 basis points (bps) to the YTM of GRNKEN 3.85 '26 (approximately 3.75% at 100.375).

• Credit Profile:

  • GRNKEN is considered a stronger credit compared to other Indian renewable energy issuers due to its strong sponsor profile.
  • Sponsors include:
    • 55% by GIC (Government of India's investment corporation)
    • 14% by ADIA (Abu Dhabi Investment Authority)
    • 21.5% by Orix Corp (Japanese investment firm)
  • Sponsors contributed USD 200 million in FY21 and GIC is expected to provide further equity for the hybrid IRESP construction during FY22-24.

Restricted Group Structure

• Capacity: 1,690 MW fully operational capacity (65% wind, 35% solar)
• Contribution to Guarantor:
  • 30.8% of total installed capacity
  • 23% of total assets
  • 21% of EBITDA
• Strong Offtakers: 50% of the restricted group's capacity is under strong offtakers such as NTPC, Gujarat Urja Vikas Nigam, and Tata Motors.
• Geographic Risk: 77% of the restricted group's capacity is located in financially weak states, including Andhra Pradesh, Madhya Pradesh, Karnataka, and Rajasthan, which increases cash collection risk.
• Financial Performance (FY21):
  • EBITDA: USD 92 million
  • Operating cash flow: USD 74 million
  • Finance cost: USD 54 million

Disclaimer and Risk Note

• The report is intended for specific institutional investors and may not be distributed to others without prior written consent.
• CMBIS does not provide individually tailored investment advice and recommends consulting professional financial advisors.
• The report is not an offer or solicitation to buy or sell securities and carries inherent risks.
• The information is based on publicly available data and is provided on an "AS IS" basis without guarantees of accuracy or completeness.

Contact Information

• Polly Ng 吴宝玲: (852) 3657 6234 | pollyng@cmbi.com.hk
• Glenn Ko, CFA 高志和: (852) 3657 6235 | glennko@cmbi.com.hk
• Wilson Lu 路伟同: (852) 3761 8918 | wilsonlu@cmbi.com.hk
• James Wen 温展俊: (852) 3757 6291 | jameswen@cmbi.com.hk
• CMBI Fixed Income: fis@cmbi.com.hk
• CMB International Securities Limited: Tel: 852 3761 8867 / 852 3657 6291

Legal and Regulatory Notes

• The report is subject to specific distribution restrictions in the UK, US, and Singapore.
• In the US, the report is only for "major US institutional investors" and must not be distributed to others.
• In Singapore, the report is distributed by CMBI (Singapore) Pte. Limited, an Exempt Financial Adviser, and may only be provided to certain investors.
• CMBIS may have conflicts of interest and is not liable for any losses arising from reliance on the report's information.