Investors Awaken to NextEra YieldCo
by Debra Fiakas CFA Last week NextEra Energy Partners, LP (NEP: NYSE) reported financial results for the third quarter ending September 2015. The numbers were released in along with quarter results from its parent, Florida-based utility NextEra Energy, Inc. (NEE: NYSE). The partnership is the operating arm of clean energy projects originated by the NextEra parent. The ‘yieldco’ as these operating entities have been kindly dubbed by shareholders, delivered $1.0 million in reported net income, but operating cash flow was a whopping $36 million in the quarter. The consensus estimate had been for $0.24 in earnings per...
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.
List of High Yield Alternative Energy Stocks
This is a list of renewable and alternative energy stocks with dividend or distribution yields above 4%. The list includes most Yieldcos (high distribution companies that own renewable energy operations), but is not limited to Yieldcos. Some Yieldcos may be excluded if their yield is below 4%.
Atlantica Yield plc (AY)
Algonquin Power & Utilities Corp. (AQN, AQN.TO)
Bluefield Solar Income Fund Ltd. (BSIF.L)
Brookfield Renewable Partners L.P. (BEP)
Clearway Energy, Inc. (CWEN,CWEN-A)
Companhia Energética de Minas Gerais (CIG)
Covanta Holding Corporation (CVA)
Crius Energy Trust (KWH-UN.TO, CRIUF)
Enviva Partners, LP (EVA)
Foresight Solar Fund plc (FSFL.L)
GATX Corporation Series A (GMTA)
Global X YieldCo ETF (YLCO)
Greencoat UK Wind PLC (UKW.L)
Green...
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...
Brookfield’s Yieldco Buying Spree
by Tom Konrad Ph.D., CFA
Last week, a Bloomberg reported on a rumor that Brookfield Asset Management (BAM) was in talks to buy Abengoa's (ABGOY) stake in its former YieldCo Atlantica Yield (ABY). Atlantica had been looking for a new sponsor for well over a year since parent Abengoa filed for bankruptcy.
Purchasing Yieldcos (companies that own clean energy infrastructure and use the cash flows to pay large dividends to shareholders) is not new to Brookfield. Not only has BAM long sponsored Brookfield Renewable Partners, LP (BEP), a limited partnership that has essentially been a Yieldco since before the term was...
Trash Stocks Trashed: An Income Opportunity?
Tom Konrad CFA Dumpster diving for high yielding gems. An earlier version of this article was written at the end of July and published on my Forbes blog, before the August market implosion. I've updated it here to reflect the new stock prices and some recent company news. Renewable energy has many advantages over fossil energy. One of the most important is that it's renewable. As supplies of Oil and other fossil fuels are used up, they become harder and more expensive to extract, while renewable energy is generally getting cheaper over time,...
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...
Solar Investing Grows Up
Tom Konrad CFA Disclosure: Long HASI, BEP. Short PEGI calls, NYLD calls. When I was asked in an interview last month what I thought 2014 would hold for green tech finance, I said 2014 would be the year that “renewable energy finance comes of age.” What I mean is that a new type of renewable energy investment is proliferating. Solar, other renewables, and energy efficiency investments are no longer limited to risky growth plays like Tesla Motors (NASD:TSLA.) There are now a number of yield focused investments available to small investors. As of last year,...
One Week, Three YieldCo Deals. Are More Buyouts on the Horizon?
by Tom Konrad, Ph.D., CFA
It's been a busy several days in the YieldCo space.
On February 5, 8point3 Energy Partners (NASD:CAFD) announced an agreement to be acquired by an infrastructure investment fund managed by Capital Dynamics. While I was still writing an article on why the sale price was at a virtually unheard of discount relative to the stock market price, two more YieldCo deals were announced: NRG Energy (NYSE:NRG) agreed to sell its sponsorship stake in NRG Yield (NYSE:NYLD and NYSE:NYLD/A) to Global Infrastructure Partners, and YieldCo TerraForm Power (NASD:TERP) made an offer to buy out Spanish YieldCo Saeta Yield (Madrid:SAY) at a 20 percent...
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...
Renewable Energy REITs or MLPs Would Unlock Billions
Jennifer Runyon According to Richard Kauffman, Senior Advisor to the Secretary, DOE, making REITs or MLPs available for renewable energy project financing is the key to advancing the industry. Top engineering, procurement and construction firms gathered to network, learn and do business with corporate-level project developers at the PGI Financial Forum, one of four co-located events that took place in Orlando, Fla. earlier this month. Richard Kauffman, Senior Advisor to the Secretary of the U.S. Department of Energy, gave the keynote address during a luncheon that took place during the conference. ...
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...
Should Pattern Energy Shareholders Vote Against the Merger?
by Tom Konrad Ph.D., CFA
This morning, hedge fund Water Island Capital called on Pattern Energy (PEGI) Shareholders to vote against the merger with the Canada Pension Plan Investment Board (CPPIB).
Water Island claims the merger is undervalued compared to the recently surging prices of other Yieldcos, and that PEGI would be trading at over $30 given current valuations. There are not a lot of other Yieldcos left, especially if we eliminate those with their own special circumstances. These are Terraform Power (TERP) which is subject to its own buyout agreement with Brookfield Renewable Energy (BEP), and Clearway (CWEN and CWEN/A) where...
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...
Terraform Power Issues $800m High Yield Green Bond
by the Climate Bonds Team This week the yieldco TerraForm Power (TERP) issued a huge high-yield green bond; seeing more high-yield bonds is a sign that the green bond market is continuing to mature. In addition to TerraForm, more green bonds from repeat issuers OPIC, World Bank, IFC and Credit Agricole have been announced and will be closing in the coming weeks. For today, let’s dig deeper into the latest green high-yield offering. The US-based renewable energy company TerraForm Power Operating has issued US$800m of senior unsecured green bonds (debentures), making it the largest green bond of 2015...
