Climate Bonds 2016 Highlights

by the Climate Bonds Team A record year with green bond issuance of USD 81bn, up 92% on 2015 figures The Trends A maturing of the green bonds market, diversification across issuers, products and use of proceeds are the main trends identified in our Green Bonds Highlights 2016 summary. The Big Numbers 92% – growth on 2015 making 2016 the most prolific year to date USD 11.8bn – November issuance, the largest month on record 24 – number of countries with green bond issuers 27% – proportion of Chinese issuers 241 – number of labelled green bonds issued (median size USD133.7m) >90 – number of new issuers >50 – number...

Hannon Armstrong Yeild On Track For 7% in Q4 With More To Come

Tom Konrad CFA After the close on Thursday, November 7th, Hannon Armstrong Sustainable Infrastructure Capital (NYSE:HASI) declared third quarter earnings.  Results were in-line with my, and other analysts’ expectations: Earnings per share (EPS) of 14 cents, and a declared dividend of 14 cents as well. This more than doubled the second quarter’s 7 cent EPS and 6 cent dividend. Note: I have a large long position in HASI. HASI remains on track to reach managements’ dividend target of “over 7% of the $12.50 IPO price” (22 cents a quarter,) and provided some additional guidance for future dividends....

Hannon Armstrong’s Strong Q2 Keeps It In My Top Picks

By Jeff Siegel Hannon Armstrong (NYSE:HASI), one of my top picks for 2014, just made me very happy. Yesterday, the company announced its Q2 Core Earnings of $4.7 million or $0.22 per share. On a GAAP basis, the Company recorded net income of $2.9 million. Here are some other highlights. . . Raised approximately $70 million in April, 2014 in a follow-on offering. Increased the flexibility and expanded the capacity of its existing credit facility by $200 million. Completed more than $200 million worth of transactions, including the acquisition of a $107 million portfolio of land...

The Making of a Solar REIT: By the Numbers

Tom Konrad, CFA A solar project at Fort Hunter Liggett in California. Photo: US Army Corps of Engineers Power REIT (NYSE:PW) announced yesterday that it had closed on a deal to buy approximately 100 acres of land leased to the owners of over 20 MW of solar projects near Fresno, CA.  This will be the company’s second solar transaction and increases the share of its revenue from solar to 21%.  These two solar transactions put PW well on its way to becoming the nation’s first REIT...

Will Investors Flock to SunEdison’s Emerging-Market YieldCo?

by Tom Konrad CFA SunEdison is proposing something entirely new: a YieldCo with a focus on projects in Africa and Asia, but it's a long way between an S-1 filing with the SEC and and IPO. The June launch of SunEdison's (SUNE) first YieldCo, TerraForm Power (NASD:TERP), transformed the parent company's prospects. Now it wants to repeat the performance with a first-of-its kind YieldCo that will focus on investment in Africa and Asia. A YieldCo is a publicly traded company that is formed to own operating clean energy assets that produce a steady cash flow,...

Convertible Solar Bonds: Trina, SunPower Stoke Fire; Ascent Descends

by Sean Kidney Trina’s $150m 3.5% 5yr convertible solar bond In June Chinese solar manufacturer Trina announced the private placement of $150m of 5 year, 3.5% convertible bonds to “institutional investors” (no details provided). Trina weren’t clear how they would use the proceeds, but they are planning to build 400-500MW of solar plants over the rest of this year. Book-runners were Deutsche Bank, Barclays, J.P. Morgan and Goldman Sachs (Asia), with co-manager HSBC. SunPower issues $400m 7yr 0.875% (!) convertible solar bond That same month SunPower announced a private placement of $400 million, 7 year, 0.875% senior convertible bonds. What...

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...
Yieldcos stock chart 2H 2020

The Yieldco Virtuous Cycle

by Tom Konrad, Ph.D., CFA Readers who followed my coverage of the Yieldco bubble in 2015 know the Yieldco Virtuous Cycle.   A Yieldco’s stock price rises It issues new shares, and invests the money in renewable energy projects.   Because the stock price is high, it is able to buy more project cash flow by issuing fewer shares than it has in the past. Cash flow available for distribution (CAFD) per share increases, despite the increasing number of shares outstanding. Yieldco management sets a target for continued rapid annual distribution growth, which can be met either by further share issuance (if...
Greenium or discount

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...

Three New Green Bonds

by Sean Kidney The International Finance Corporation (IFC) is planning to issue $1bn Green Bonds per annum. Hawaii is setting up a bond-funded green bank Germany’s PNE Wind is planning a €100m corporate bond Trade Finance magazine reports that the IFC is planning to issue $1bn a year of Green Bonds. After talking with IFC folk in Washington DC last week I think I can say that the resounding success of last month’s first $1bn IFC Green Bond is making them think much more ambitiously than before. We think they should also...

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, Created Unequal

Tom Konrad CFA Renewable Energy Investing Grows Up. In January I predicted 2014 would be the year "renewable energy finance comes of age."  Here's how Jennifer Runyon quoted me on Renewable Energy World: Konrad believes that 2014 will be a great year for renewable energy finance, he said.  He said that we saw the beginning of it in 2013 with the securitization of a bond by Solar City (SCTY) and pointed to Hannon Armstrong’s (HASI) securitization of an energy efficiency bond in late December 2013 as another indicator that renewable energy...

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...
Bernard Tan

Royalties: a Financial Innovation for Renewable Energy

The following interview with RE Royalties (RE.V, RROYF) CEO Bernard Tan was conducted in September by AltEnergyStocks.com Editor Tom Konrad.  Links and ticker symbols were not included in his original responses, but added by AltEnergyStocks.com as a resource for readers. Q: What exactly is a renewable energy royalty? A renewable energy royalty is a stream of cash flows generated by a renewable energy project. When the project generates electricity and sells its electricity, we receive a percentage of the revenues from the electricity sales, otherwise known as a gross revenue royalty. We receive that gross revenue royalty, on average, for about...

Recent Green Bonds: Toyota Hybrids, SunRun, Efficient Homes and Data Centers

by the Climate Bonds Team Last month Toyota closed their second green bond for a whopping $1.25bn. Standard auto loans backed the issuance with proceeds to be used for electric and hybrid car loans; that means it’s more like a corporate green bond, where proceeds from a bond backed by existing (non-green) assets are directed green loans still to be made. Sunrun issued $111m of solar ABS, and a small unlabelled energy efficiency ABS was also issued by Renew Financial and Citi for $12.58m. Sunrun and Citi/Renew Financial are examples of ABS where the assets backing the issuance...

Four Clean Green Dividends

by Debra Fiakas CFA The recent pullback in stock prices in the U.S. equity market has opened the door to some interesting dividend yields.  Investors with a taste for environmentally-friendly businesses have some particularly interesting alternatives that can pump up the purse as well as protect Mother Earth. AES Corporation (AES:  NYSE) is a world-class power generator from mixed portfolio of conventional and renewable power sources.  About 28% of its 29,352 megawatts of generation capacity is from renewable fuel sources, including hydro, biomass, solar and wind, and another 33% from plants using natural gas.  The balance of...
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