Ahmedabad – Adani Green Energy Ltd (AGEL), through its subsidiary Adani Solar Energy AP Six Private Ltd, raised a yen-denominated facility to refinance its existing indebtedness. The facility consists of JPY 27.954 million (° C. 200 million US dollars equivalent) amortizing loan for a project evaluating the 16-year debt structure with a door-to-door tenure of 10 years and an average tenure of more than 8 years. The loan facility for the project is supported by AGEL’s strong relationship with the two main relationship banks – MUFG Bank, Ltd and Sumitomo Mitsui Banking Corporation with equal participation. The facility is also a testament to AGEL’s strong relationship with its core banking partners, creating an appetite for large scale and long-term maturity through the development of market instruments leveraging liquidity and expanding access to fundraising.
The facility is linked to the Tokyo Overnight Average Rate (TONA), a Japanese interest rate benchmark that yields close to zero, underscoring the attractiveness of expanding alternative capital pools providing relatively competitive interest rates. The company is committed to accessing long-term capital without depleting its growth capital and will continue to look at multiple alternative capital pools to have a sustainable funding solution to lead of India energy transition.
The refinancing facility is in line with AGEL’s strategy of securing long-term financing, establishing a debt structure in line with the underlying asset life for its operating assets. The facility follows the principles of investment grade credit benchmarks that have a life cycle leverage profile (measured by debt to EBITDA) of c. 3x covering the main tenor of the PPA.
“This is an excellent result for AGEL, which shows strong support from our lenders and demonstrates our ability to access bank debt on competitive terms in sync with the underlying asset development model to provide a long-term solution,” said Mr Phuntsok Wangyalfinancial director, Adani Green Energy Ltd “The facility demonstrates AGEL’s proactive and consistent approach to accessing liquidity against a challenging interest rate environment in the wider markets, providing a long-term solution. With a lower reference rate, lower margin and historically low swap rates, this provides significant flexibility and a competitively priced financing solution for AGEL’s high-quality portfolio of renewable assets.’
MUFG Bank, Ltd.and Sumitomo Mitsui Banking Corporation acted as primary lenders to the Facility. Latham & Watkins LLP and Cyril Amarchand Mangaldas acted as legal advisors on the transaction.
Adani Corporate House
Shantigram, Near Vaishnodevi Circl
Highway, Ahmedabad-382421, Gujarat, India
Tel.: +91 79 2656 5555
Fax: +91 79 2555 6490
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