The Clear Way to Buy Clearway
By Tom Konrad, Ph.D., CFA
A reader of my recent article on Yieldcos asked which share class of Clearway Energy was the better to buy for tax purposes: Class A shares (CWEN-A) or Class C Shares (CWEN).
For tax purposes, they are identical. They pay the same dividend, and it is treated the same no matter which share class you buy. The reason many large investors often trade CWEN rather than CWEN-A is because it is more liquid. As I write on Jan 23rd, Yahoo! Finance puts the 3 month average share volume for CWEN at 1,372,714, while the corresponding number...
Capstone Infrastructure: How Bad Is The Worst Case?
Tom Konrad CFA Disclosure: I have long positions in MCQPF and AQUNF. Capstone Infrastructure Corporation (TSX:CSE, OTC:MCQPF) has been trading at a significant discount to its peers because of a power supply agreement which expires at the end of 2014. Capstone is seeking a new agreement with the Ontario Power Authority for its Cardinal gas cogeneration facility, a process which has taken much longer than management expected. The cardinal Cardinal plant currently accounts for about a third of Capstone’s revenue and a quarter of earnings before interest, taxes, and depreciation (EBITDA), but two-thirds of distributible income. The high fraction...
The Greenium: Growing Evidence of a Green Bond Premium
Highlights from the latest Q4 2017 Green Bond Report from the Climate Bonds Initiative: Two years of data observations examining green bond behavior in primary markets
Climate Bonds Initiative has released the fourth “Green Bond Pricing in the Primary Market” report analysing the performance of green bonds issued in the period October-December 2017. This is the last quarterly report; future publications will be produced semi-annually allowing a more longtitudinal analysis as the market expands.
The Q4 2017 report covers USD15.1bn or almost 40% of the face value of labelled green bonds issued in Q4. 15 EUR and 8 USD labelled green bonds are...
Are Aspiration’s Deposits Really Fossil Fuel Free?
Fossil Fuel Free Claims
If you are reading this, you've probably also seen advertisements for Aspriation's “Fee-free and fossil fuel free” banking services. Like the advertisements the company's product page encourages visitors to “Earn high interest on what you save with an account that is fee-free and fossil fuel free.“
As a professional green money manager, I know that “fossil fuel free” is in the eye of the beholder. For many mutual funds, “fossil fuel free” simply means avoiding the 200 largest fossil fuel companies, but investing in the 201st largest fossil fuel company, even if its primary business is mining...
Solar Bonds and Other Green Income Investments Compared
by Tom Konrad CFA Clean-energy stocks’ performance over the last couple of years proves that it’s possible to do well – sometimes very well – while doing good. Unfortunately, it’s also possible to lose a lot of money. Case in point: solar installer SolarCity’s stock (SCTY) price has more than quintupled since its 2012 IPO, but has fallen 40% since the start of the year. Swings like these are just too wild for many investors to stomach. So the news that California-based SolarCity launched the first public offering of solar bonds last week likely piqued the interest of sustainability-minded...
Buying Innergex – Texas Was Bad, But Not That Bad
By Tom Konrad, Ph.D., CFA
Last week, I published this call to buy Innergex (INGXF, INE.TO) because investors had been overreacting to the losses from the February cold snap in Texas. The stock is up since then, but still seems a decent value.
Canadian Yieldco Innergex Renewable Energy (INGXF, INE.TO) took a big financial hit from the power disruptions in Texas in March.
It's complex, but their financial hedges on power prices for three of its wind farms ended up creating enormous liabilities - more, in fact, than two of their wind farms are worth. Two of their facilities also had benefits...
Fifteen Clean Energy Yield Cos: Where’s The Yield?
Tom Konrad CFA In the first article of this survey of yield cos, I noted that many of the recent yield co IPOs have risen so far as to "lend the very term "yield co" a hint of irony" because rising stock prices are accompanied by falling annual dividend yields. Yield Co Worries Because yield cos invest in clean energy infrastructure such as wind farms and solar facilities, conservative income investors may worry about the durability of the technology. Will solar panels still be producing power twenty...
Toyota’s Asset Backed Green Bond: This Is Big
Sean Kidney Toyota Motor Corp. (NYSE:TM) will close mid-next week on what will be the world’s first green bond backed by auto loans – electric vehicle and hybrid car loans to be specific. And what a kickstart for that market, at $1.75 billion. According to a report in International Financing Review (IFR), the bond will be in multiple tranches, each at a different ratings level: A2 tranche, A3 and A4 (Moody’s ratings). First thing to know: they told the media a week ago it would be a US$774.675 million bond. Rumour has it that initial investor interest...
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 =...
10 Clean Energy Stocks for 2020: Updates on GPP, HASI, CVA
by Tom Konrad, Ph.D., CFA
Market Decline
Last week I warned "The risks in today's stock market outweigh the possibility of future potential gains." Looks like we're seeing those risks manifest in short order. The last couple days' decline have me looking at a few stocks to start adding to my positions again, especially MiX Telematics (MIXT) discussed on June 2nd and Green Plain Partners (GPP), discussed below.
Note that this pullback could easily be very early days of a much larger market decline. We might even see the market fall far enough to test the March lows... any of my buying...
Five Green REITs
by Tom Konrad Ph.D., CFA
Why Green Buildings are Profitable Buildings
Buildings are responsible for approximately a third of greenhouse gas emissions, so making buildings more efficient and switching them to renewable sources of energy is an essential part in addressing climate change.
Fortunately, new technologies such as cold climate heat pumps, heat pump water heaters, induction stoves, as well as the ever falling cost of renewable electricity and improvements to insulation and building envelopes often provide opportunities to improve buildings while achieving extremely attractive investment returns from the energy and maintenance savings alone.
Because of the great financial returns, building owners who...
Trina Solar’s Second Convertible Bond
By Beate Sonerud and Sean Kidney China’s Trina Solar (TSL)is issuing US$100m of convertible bonds with 5-year tenor and 4% annual coupon, with semi-annual payments. An extra US$15m could be raised, as Trina has given the underwriters a 1-month window to buy additional bonds. Guess they are waiting to gauge demand. Underwriters are Deutsche Bank, Barclays, and Credit Suisse, with Roth Capital Partners as co-manager. The bonds can be converted to shares (American Depositary Shares, meaning they are listed in the US) at an initial price of US$14.69 per share. Currently, Trina’s shares are trading at US$11.40, after...
Fifteen Clean Energy Yield Cos: Company Structure
Tom Konrad CFA In the first article of this survey of yield cos, I looked at the possible reasons for the seemingly endless enthusiasm for US-listed clean energy yield cos. Here, I'll take a look at how these yield cos are constructed, and why investors should prefer one structure over another. Who's Your Daddy? Most yield cos have been created by clean energy project developers in order to create a ready, low-cost buyer for those projects. With the recent string of very successful IPOs, the capital available for such projects may prove...
The Pros Pick Three Green Income Stocks For 2014
It’s now possible to invest in green stocks for income, not just for growth. Here are three picks for 2014 from green investing professionals.
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...
Buyer’s Guide to New York Community Solar
By Ishaan Goel
WHY COMMUNITY SOLAR?
A home solar system is a great investment, with financial returns far in excess of any financial investment that has comparable risk. It’s also a tangible step a homeowner can take to help the environment.
Unfortunately, most New Yorkers (and Americans in general) can’t install home solar. They may be renters, or have roofs that are too old or shaded. Or they may not be able to afford the up-front cost, or not have enough income to take advantage of the tax credits.
That is why New York’s electricity regulator, the Public Service Commission, created community solar:...
