US investor KKR-backed Virescent Infrastructure today announced its renewable energy-focused infrastructure investment trust (InvIT), Virescent Renewable Energy Trust (VRET), has raised INR 650 crore (US$87 million) through non-convertible debentures issuance.  

VRET raised the amount across 7.33-year (INR 150 crore/US$ 20 million) and 10-year (INR500 crore/US$67 million) tranches. 

“This transaction marks the largest single series issuance of INR 500 crore in 10-year tenor by a Renewable Energy Company. This bond issuance establishes a new yield curve for VRET, while also achieving significant elongation of average tenor as compared to the earlier INR 1,000 crore bond issuance of VRET in November 2021 (4.8 years to 9.4 years),” Virescent stated. 

The average quarterly coupon rate of the bonds is 7.93%, fully fixed for the entire tenor.  

VRET will primarily use the bond proceeds to fund its immediate acquisition-related debt requirements as it scales up its portfolio from the existing 450 MW (peak) of operational solar projects. 

The bonds are assigned the highest domestic rating of AAA (Stable) by CRISIL and India Ratings.  

Virescent said the success of the transaction highlights the faith of the investor community in the strength of KKR as the Sponsor and the presence of long-term power purchase agreements (PPAs) for the entire capacity, a diverse portfolio of underlying assets in terms of geography, counterparty, operators and equipment suppliers, demonstrated track record of stable operations, timely receipt of payments from the offtakers for a majority of the projects, strong debt coverages as well as robust debt protection features as per the India Ratings credit rationale. 

Investors 

The bonds were subscribed by the government-backed India Infrastructure Finance Company Limited as well as the NIIF-promoted Aseem Infrastructure Finance Limited 

Sanjay Grewal, CEO, Virescent Infrastructure said “This bond issuance is a significant achievement in VRET’s journey, demonstrating our debt raising capabilities to achieve competitive pricing and longer maturity profiles. With VRET being a recently established entity in September 2021 and only five months into our journey, we are pleased to have issued such long tenor bonds and attracted marquee institutional lenders.”  

Grewal added, “It is very encouraging to see specialized lenders and development finance institutions such as Infrastructure Finance Company Limited (IIFCL) and Aseem Infrastructure participate in the long-term debt markets as it will go a long way in creating much-needed capital for infrastructure funding.  

The investment marks India IIFCL’s first transaction into long-term infrastructure project bonds. 

Padmanabhan Raja Jaishankar, Managing Director, IIFCL said “Keeping in mind country’s infrastructure needs and development of bond markets, IIFCL has embraced these objectives by investing into Infrastructure Bonds, thereby boosting the availability of longer-tenor bond finance. This step will propel the new financial architecture wherein financial institutions and banks fund the construction phase and later re-financings are funded through the bond market and IIFCL is accelerating this proposition.” 

This issuance also marks Aseem Infrastructure Finance’s first fixed investment in a significantly longer tenor (10 years) Infrastructure Bond. Virender Pankaj, CEO, Aseem Infrastructure Finance Ltd, said, “[this investment] is in line with our aspiration to become one of the leading players in infrastructure financing by providing focused and customized solutions to clients.”