Biznextindia : Adani Green Energy Ltd on Thursday said it has raised 27,954 million Japanese Yen (around Rs 1,630 crore) through its subsidiary Adani Solar Energy AP Six to refinance its existing indebtedness.
The project loan facility is supported by AGEL’s strong relationship with its two core relationship banks – MUFG Bank, Ltd and Sumitomo Mitsui Banking Corporation with equal participation. The facility is also testament of AGEL’s strong relationship with its core banking partners creating the appetite for large size and the long tenor through development of market instruments tapping in liquidity and widening the access to fund raising.
The facility is linked to Tokyo Overnight Average Rate (TONA), a Japanese benchmark rate gauge, which yields close to zero highlighting the appeal to broaden the alternative pools of capital providing relatively competitive interest rates. The company is committed to have access to long-term capital without depleting its growth capital and will continue to look at multiple alternative pools of capital to have the sustainable funding solution to spearhead India’s energy transition. The refinancing facility is consistent with AGEL’s strategy of securing long term financing establishing the debt structure in conformity to underlying asset life for its operational assets. The facility follows the principles of investment grade credit metrices which have the life-cycle leverage profile (measured through Debt to EBITDA) of c. 3x covering the underlying PPA tenor underlying asset development model to a provide long-term solution,” said Mr Phuntsok Wangyal, CFO, Adani Green Energy Ltd.
“The facility demonstrates AGEL’s pro-active and continued approach to access liquidity against the backdrop of a challenging interest rate environment in the broader markets, providing the long-term solution. With lower benchmark rate, lesser margin and historical low swap rates, this provides significant flexibility and a competitively priced funding solution for AGEL’s high grade renewable asset portfolio.”
MUFG Bank, Ltd., and Sumitomo Mitsui Banking Corporation acted as principal lenders for the Facility. Latham & Watkins LLP and Cyril Amarchand Mangaldas acted as legal counsels for the transaction