Greentech Lead India: Indian wind turbine maker Suzlon Energy has sold $650 million (around INR 3,575 crore) worth of bonds backed by lenders, including State Bank of India, to refinance the debt, livemint reported.
AE-Rotor Holding BV, a unit of Suzlon Energy, has closed the bond issue on Monday. The sale was arranged by JPMorgan Chase and Co. and SBI Capital Markets, the report said.
“These bonds are five-year fixed rate senior unsecured bonds backed by unconditional and irrevocable stand by letter of credit from SBI,” one of the sources close to the development revealed to livemint.
Rohit Chatterji, head of investment and corporate banking at JP Morgan, said the bond issue was successfully subscribed by a wide variety of investors across Asia and Europe; however details of the investors are not revealed.
Another source from Suzlon was quoted saying, “The company will use this amount to refinance the existing dollar debt. Though the existing international dollar loans are not bearing high interest costs, the current bond issuance will help to improve the cash flows as the company can enjoy the single bullet repayment instead of multiple installments,”
Analysts feel that raising a bond to pay off their foreign currency convertible bonds is a good idea because the bonds will be at a lower price than their existing debt.
“Renewable energy will always receive government subsidy and if Suzlon Energy can trim its debt it will be in a better position to take advantage when sovereign issues are resolved in the developed world,” said Abhijeet Biswas, managing director at Fortune Financial Services (India).
Suzlon is becoming the first Indian company to attract investors while already in debt recast, merchant bankers to the deal said.
“Suzlon today successfully sold $ 647 million worth of five-year dollar Reg S (regulation S) bonds at a coupon of 4.97 per cent to the US treasury. This is the first ever credit enhancement bond sale by a domestic firm,” Chatterjee told PTI.