Eneti and Brookfield Renewable Earnings
By Tom Konrad, Ph.D. CFA
Here are a couple earnings notes I shared last week with my Patreon followers.
Eneti, Inc. (NETI) - formerly Scorpio Bulkers (SALT)
Eneti completed its name and ticker change on February 8th. New ticker is NETI (formerly Scorpio Bulkers (SALT), which I recently wrote about here.
Highlights from February 2nd earnings report:
37 of the 47 vessels owned at the 3rd quarter have been sold or have completed sale agreements.
Net asset value is $23.94/share. Since most assets are cash or vessels held for sale, this number is basically accurate.
The stock is still a good buy...
Fossil Fuel Companies Should Be Issuing Green Bonds
by the Climate Bonds Team ‘Fossil fuel companies should not be issuing green bonds because they are not green businesses.’ Varying versions of this statement crops up often at green bond conferences and in articles. We disagree, and here is why: It’s use of proceeds that matter Green bonds are about use of proceeds. What matters is the green characteristics and features of the projects that are being invested in, the ‘use of proceeds’, not the balance sheet backing the bond. This is an accepted concept in the green bond market...
SolarCity’s Second Solar Lease-Backed Bond Closes Thursday
SolarCity is on the road with a $70.2m, 8yr, BBB+ rooftop solar leases securitization; closes Thursday Sean Kidney US company SolarCity (NASD:SCTY) has priced a solar bond backed by cash flows from a pool of 6,596 mainly residential solar panel systems and power purchase agreements in California, Arizona, and Colorado. Expected bond figure is $70.2 million, but the bond doesn’t close until Thursday this week. Interest rate is 4.59%. Credit Suisse is structurer and sole bookrunner. This is SolarCity’s second solar securitization in six months. Their previous (ground-breaking) bond was for $54.4 million with an...
Nordex Issues First Green Schuldschein
by the Climate Bonds Team German green debt instrument raises €550m ($621m) for wind energy and gains Climate Bonds Certification. German wind company Nordex (NRDXF) is the first Schuldschein issuer to label its issue as green. The green issue is verified under the Climate Bonds Standard and sector specific Wind Standard. Assets include wind power manufacturing and infrastructure around the world. Nordex employed DNV GL to verify the green Schuldschein against the Climate Bonds Standard. The deal was split across four tranches with 3, 5, 7 and 10 year tenors. The joint underwriters were...
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 =...
US Yieldcos Will Survive
by Susan Kraemer As unrealistic expectations of dividend growth are scaled back, yieldcos are now on a more sustainable path. Weaknesses in the US yieldco model came into sharp relief this summer as share prices fell along with oil and gas stocks. This was in part due to investor confusion about energy stocks but also in response to a flaw in US yieldco expectations. Manager of the Green Global Equity Income Portfolio and AltEnergyStocks.com editor Tom Konrad Ph.D., CFA had warned of the looming potential for exactly this kind of market correction in a conversation a...
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...
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...
Second Largest Quarter For Green Bonds Ever
Third quarter reflects strong growth and new market entrants
Overview
The green bond market has kept its strong pace in Quarter 3 2017, reaching a total of USD27.7bn from July to September.
On September 28th, the total amount of green bonds issued in 2017 ytd (USD83.2bn) overtook last year’s total issuance of USD81.6bn.
We covered the big moment in our Blog Post here.
Lots of new issuers
The top sources of issuance were:
Mexico - USD4bn
China - USD3.9bn
France - USD3.3bn
U.S. - USD2.8bn
India - USD1.9bn
Mexico was a surprising addition to the number one spot, after issuing no green bonds in Q1 or Q2 this year.
Big...
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...
Why This German Solar Executive Is Skeptical About American YieldCo Assumptions
by Tom Konrad CFA Ever since the first YieldCo, NRG Yield (NYSE:NYLD), went public in 2013, it and other similar YieldCos have been reshaping the market for operating renewable energy assets, especially wind and solar PV farms. A YieldCo is, to put it simply, a publicly traded subsidiary of a developer and operator of clean energy farms that uses the cash flow from its assets to return a high current dividend to shareholders. Most large, publicly traded clean energy developers have already launched or are preparing to launch a YieldCo. The current crop includes NRG Yield, Pattern...
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...
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...
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:...
How Much Could Another Yieldco Pay For 8point3?
by Tom Konrad Ph.D., CFA
When SunPower (SPWR) and First Solar's (FSLR) YieldCo, 8point3 Energy Partners (CAFD), went public two years ago, I used the financial nerd joke in 8point3's ticker symbol as a launching point to explain what "cash available for distribution," or CAFD, means.
In that article, I cautioned against the risks of using a short-term cash flow measure for long-term investing decisions. That risk is becoming more and more real for investors in 8point3 because the YieldCo is using short-term, interest-only financing to fund its long-term investments.
All of 8point3's debt matures in 2020, and refinancing that debt will...
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...
