Adani Transmission launches $2B Global Medium-Term Notes Program, first takedown oversubscribed by 9.2x

The issuance bolsters the strong capital raising track record of the Adani Group from global capital market investors.

Jul 23, 2021 05:07 IST India Infoline News Service

Adani Transmission
Adani Transmission Limited’s (ATL) distribution arm, Adani Electricity Mumbai Limited (AEML), has announced the setup of a USD 2 billion Global Medium-Term Notes program (GMTN). The GMTN program and the Sustainability Linked Bond issuance is the next step in AEML’s Capital Management Plan. AEML also settled the maiden takedown of USD 300m under the program today.

The order book for the takedown was oversubscribed by 9.2x by high-quality real money global investors and the global geographical split of the investors was Asia – 49%, EMEA – 27% and North America – 24%.

“The challenging short-term targets of increasing the renewable energy penetration in AEML’s power purchase mix from the current 3% to 30% by 2023 and then 60% by 2027 are legally covenanted targets which are consistent with the COP26 targets,” said Kandarp Patel, MD & CEO, Adani Electricity Mumbai Limited.

“AEML has set for itself some of the nation’s most challenging renewable penetration targets in the short term, thereby showcasing our commitment towards net-zero emissions. We have also committed to the short-term target of reductions of Green House Gas (GHG) Emission Intensity by 60% from FY19 levels to stay in line with COP26 targets. In addition to the legally covenanted targets, we have publicly announced a target of 70% renewable penetration by 2030.”

The Key Performance Indicators chosen for the SLB framework contribute to UN Sustainable Development Goals SDG 7 (Affordable Clean Energy), SDG 11 (Sustainable Cities and Communities) and SDG 13 (Climate Change).

The issuance bolsters the strong capital raising track record of the Adani Group from global capital market investors. The transaction will be settled on 22 Jul 2021 and the funds will be utilized for refinancing of existing debt and regulatory asset development for enabling ‘asset hardening’

The assurance of the Sustainability Framework was completed through external agencies. Vigeo Eiris, a subsidiary of Moody’s Investor Service, provided a second party opinion on AEML’s Sustainability Framework. The baselines for the targets have been assured by third-party verifiers – the British Standards Institute and the statutory auditor of AEML.

The transaction marks several firsts for India:
  • The tightest coupon ever by a BBB- rated utility issuer in Asia (ex-Japan),
  • The largest order-book oversubscription ever for a 10-year ESG bond issuance in Asia (exJapan),
  • The first Sustainability Linked Bond (SLB) issuance from an Indian utility.
The assurance of the Sustainability Framework was completed through external agencies. Vigeo Eiris, a subsidiary of Moody’s Investor Service, provided a second party opinion on AEML’s Sustainability Framework. The baselines for the targets have been assured by third-party verifiers – the British Standards Institute and the statutory auditor of AEML. The JLMs to the transaction were Axis Bank, Barclays, Citigroup, DBS Bank, Deutsch.

AEML, one of India’s largest integrated utilities, servicing over 12 million consumers in Mumbai, priced its first takedown of USD 300 Mn through 10-year notes under the 144A / REG S format. With this landmark transaction, AEML’s capital management plan enters the second phase with 100% of the term debt being placed in the international capital markets with the overall maturity now increased to ~9 years.

On Sensex, Adani Transmission finished at Rs961.20 per piece down marginally. 

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