 "CLP India issues partially credit enhanced bonds for its Jhajjar Power Plant")
The company is one of the first power companies in India to issue asset-specific bonds. India Ratings and Research Private Limited has assigned a rating of AA+(SO) to the bonds. The bonds, with a semi-annual coupon of 9.99 per cent per annum, are being issued in two series of equal amounts and will mature in April 2025 and April 2026, respectively. The bonds would be listed on the Wholesale Debt Market segment of the BSE. Standard Chartered Bank and IDFC Limited are the lead managers to the issue.
Rajiv Mishra, managing director, CLP India, said, “At CLP India, we have always looked at innovative ways to finance our projects to grow our portfolio and reinforce our commitment to the Indian power market.”
The bond issue will enable Jhajjar Power Limited to attract a wider array of investors, including Insurance companies, mutual funds and foreign portfolio investors (FPIs). “The bonds will present an attractive option for investors. By replacing existing bank debt with a capital market instrument, this bond issuance will diversify our debt profile,” said Samir Ashta, director- finance and chief financial officer, CLP India.
The partial credit-enhanced bond is a first of a kind and will go a long way in the development of the Indian corporate bond markets, said Kaustubh Kulkarni, Managing Director & Head Debt Capital Markets, South Asia, Standard Chartered Bank.
“The innovative structure achieves the twin objectives of accessing long-term funds at competitive rates for the issuer and an attractive long-term investment opportunity for the investors. It opens up financing avenues for infrastructure projects, which has been a big thrust area for the government,” he said.
“This unique transaction will create a benchmark and pave the way in the future for re-financing of large infrastructure projects, post commissioning. The transaction structure has strategically balanced different objectives of the Issuer in terms of fixed rate long-term borrowings, securing a high credit rating from the rating agency and generating appetite from different investor classes," said Jayen Shah, head-debt capital market of IDFC Ltd.
CLP India is the wholly owned subsidiary of CLP Holdings Ltd, which is listed on the Hong Stock Exchange and is one of the leading investor-owned power businesses in Asia. It is one of the largest foreign investors in the Indian power sector with a total committed investment of over Rs 14,500 crore. This investment is spread across a diversified and environment-friendly generation portfolio that covers renewable energy, supercritical coal and gas fired power plants, amounting to over 3,000 mw.
CLP entered the Indian power sector in 2002 with the acquisition of a 655 MW gas fired power plant which is located in Bharuch, Gujarat. This power plant was one of the first independent power projects in India and complies with the highest level of internationally accepted standards in safety and in environment conservation.