Record-Breaking $9bn Green Bonds Issued in Q1
Bridget Boulle It’s been another ground breaking quarter for green bonds – the biggest yet with just under USD9bn issued ($8.997bn). It seems our initial estimate of $20bn for the year will be met much sooner than we thought so we’ve revised it to $40bn (there are no rules). There have been new issuers, new currencies, new underwriters, new areas of issuance and, for the first time, a green bonds index. All good things, here is a summary… The development banks led the way for the quarter but not by too much: development banks = USD4.9bn while corporates =...
Is Suzlon’s $650m Wind Bond the First of Many?
India had been trying to get a corporate bond market going for 15 years – search “growing India corporate bonds” and you’ll find papers on the subject from the Reserve Bank of India, Bank of International Settlement and others scattered over past years. The latest Indian 5 year plan has this as a priority – and has green finance as a priority in a separate section. India has a particular need: a miniscule local corporate bond market means restricted financing options for business, including for renewable and energy efficient building developers – diversity with financing options helps drive down costs...
$37B 2014 Green Bond Issuance Triples Market
by Tess Olsen-Rong Following a landmark green bond growth year in 2013, the labelled green bond market has once again experienced a year of incredible growth in 2014: by year-end there had been $36.6bn of green bonds issued by 73 different issuers – that’s more than a tripling of the market! The final figure was boosted by a late flurry of green municipal bonds. This exponential growth takes the total amount of green bonds outstanding to $53.2bn by the end of 2014. So, what happened to cause this tripling of issuance? Well, corporate and municipal bond...
Solar REITs: A Better Way to Invest in Solar
Tom Konrad CFA The last day for a solar developer to submit an application for the Treasury’s 1603 grant program was September 30th, and only for grandfathered solar projects which broke ground before the end of 2011. Solar panel prices have continued to drop this year, but solar project development remains a capital-intensive business. The 1603 program allowed solar developers to monetize the solar investment tax credit (ITC) much more quickly than they could otherwise, and this essentially reduced their cost of capital. As the rush of projects begun before the end of 2011 are completed, developers are looking...
Green Bond Market Heats Up After Slow Start To 2015
$7.2 billion of green bonds issued. Market shows signs of maturity, including more currencies, and non-investment grade bonds. Emerging market green bonds are ramping up, while green munis are booming. by Tess Olsen-Rong, Climate Bonds Market Analyst The first three months of 2015 (Q1) have seen 44 green bond deals totalling $7.2bn of issuance. After relatively low issuance in January the amount of green bonds issued has been climbing each month, with March three times bigger than January. This year will be the biggest year ever for green bonds: there’s a healthy pipeline of bonds in the...
Atlantica Q1, Buying Hannon Armstrong
By Tom Konrad, Ph.D., CFA
Here are two more updates from last week on Patreon. Also, I realize I neglected to publish the monthly performance chart for my 10 Clean Energy Stocks model portfolio here at the start of the month, so here it is as well:
Atlantica Sustainable Infrastructure Earnings
(published May 11th)
Atlantica Sustainable Infrastructure (AY) released its first quarter earnings announcement and financial statements on May 6th.
Atlantica is one of the higher yielding Yieldcos, 5.3% at the new quarterly dividend rate of $0.43 and a $32.50 stock price. The dividend is safe, since most of Atlantica's debt is fixed rate,...
Comparing Community Solar Subscriptions And Yieldcos
By Tom Konrad, Ph.D. CFA Community solar is gaining traction in many states. The concept, also known as shared solar or solar gardens, originated in the mid-2000s as a way to allow broader participation in the ownership of solar photovoltaic (PV) systems, while also encouraging local development. Community solar broadens access to solar beyond homeowners with suitable roofs. A National Renewable Energy Laboratory report from 2015 estimated that 49 percent of households cannot own solar because they do not own their own home, or they live in high-rise buildings with insufficient roof space. Rooftop solar is impractical for many...
Are YieldCos Overpaying for Their Assets?
Tom Konrad CFA YieldCos buy and own clean energy projects with the intent of using the resulting cash flows to pay a high dividend to their investors. Several such companies, often captive subsidiaries of listed project developers, have listed on U.S. markets since 2013. So far, YieldCos have been a win-win: The developers that list YieldCos have gained access to inexpensive capital, and income investors have gotten access to a new asset class paying stable and growing dividends. So far, they have also gained from significant stock price appreciation. The seven U.S.-listed YieldCos are up...
YieldCo Bubble: The Aftermath
Readers may be interested in listening to this podcast. Where Stephen Lacey and Shayle Kann of GreenTechMedia speak with me about the current YieldCo landscape. Follow this link to The Interchange Podcast. -Tom Konrad, Editor
Q1 Earnings Roundup: Yieldcos (AGR, BEP, CWEN, GPP)
By Tom Konrad, Ph.D., CFA
This is a roundup of first quarter earnings notes shared with my Patreon supporters over the last week. If there is any theme, it’s that low interest rates and increased interest in green investments is lowering Yieldcos’ cost of capital to the benefit of stock investors.
Avangrid Earnings
Avangrid's (AGR) Q1 earnings report showed solid progress. Key items of note were:
Increased outlook for full year 2021 Adjusted EPS a little over 5%
Key environmental approval for 800 MW offshore wind farm Vineyard Wind. Expected to begin construction later this year, with expected completion in 2024. Avangrid...
What Yieldco Managers Are Saying About The Market Meltdown
by Tom Konrad Ph.D., CFA Note: This article was first published on GreenTechMedia on Noveber 27th. In the last six months, YieldCos have fallen from stock market darlings to pariahs. YieldCos are companies that buy clean energy projects such as solar and wind farms, and use the majority of free cash flow from these projects to pay dividends to investors. Many are listed subsidiaries or carve-outs of large developers of clean energy projects. Last year, investors repeatedly punished leading solar developers and manufacturer First Solar and SunPower for their reluctance to launch YieldCos. When...
Sunny Climate For Solar Income Up North
Tom Konrad CFA Disclosure: I am long PW and HASI. In a rational world, the sunniest places would have the warmest reception for solar technology and investment. While solar is having its day in the sun in Hawaii, state incentives make the economics of photovolatics equally attractive in Vermont, a state not known for its sunny skies. And while California is famous for its rapid deployment of solar, the economics are at least as good in Washington state, New York, New Hampshire, and chilly Maine. It’s not only the economics of solar which can counter-intuitively get better...
Northland Power’s Solar-Backed Bond
New Canadian Climate bond: Northland Power releases a pretty big ABS - CA$232m (US$206m) - backed by solar projects with proceeds for renewables. 18-year tenor, 4.397% coupon, BBB. Securitisation key future area for green bonds.
Three Clean Energy Stocks That Won’t Keep You Up At Night
Tom Konrad CFA If you want to green your portfolio, but the wild swings of First Solar (NASD:FSLR), Tesla (NASD:TSLA), SolarCity (NASD:SCTY), and even clean energy ETFs like Powershares Wilderhill Clean Energy (NYSE:PBW) are a bit too much to let you sleep at night, you’re not alone. A reader recently suggested I write about more green stocks like Waste Management (NYSE:WM), which readers can own and not worry about too much. I thought it was an excellent suggestion; I’ve recently been writing much more about much more exciting or terrifying stocks, because there is simply a lot more...
Covanta and Hannon Armstrong Earnings
by Tom Konrad, Ph.D. CFA
Two more earnings notes I shared with my Patreon followers on February 18th.
Covanta Holdings (CVA)
Leading waste-to-energy firm Covanta Holdings (CVA) announced 2020 earnings today. There will be a conference call tomorrow morning, but here is my high-level impression:
The company managed well through Covid and ended the year within it's original pre-covid guidance. Metals and energy prices, as well as increased maintenance capital expenditures were a drag on results, but prices are improving and capital expenditures will fall in 2021.
The company is conducting a strategic review which will likely result in the sale of some underperforming...
Buffet Bet Comes Out for Solar
by Sean Kidney Warren Buffet is a famous proponent of value investing and he surely received a sign of the value in solar investments over fossil fuels last week. The MidAmerican Energy $850m Topaz solar project bond we mentioned a couple of weeks ago was so successful that a second tranche is expected to cover the remaining debt of the project. The offer was oversubscribed by $400m which would have mopped up the total $1.2bn of debt in the project; Buffet's Berkshire Hathaway (BRK-A) controls MidAmerican. In contrast, Buffet’s investment in $2bn of bonds from gas company...
