APAC CREDIT PREVIEW: Greenko Energy Holdings headlines measured session

Headlines (20-Mar-25)

** Greenko Energy Holdings looks attractive at the outset

** Comps are revealed for Korea National Oil Corporation's upcoming multi-tranche exercise

High yield investors are being provided for in the APAC USD primary bond market on Thursday, courtesy of Indian renewable energy company Greenko Energy Holdings, in another otherwise measured session for supply. That after a more constructive tone in US risk markets overnight hasn’t really translated into widespread gains in stock markets closer to home, which are more mixed this session.

Greenko Wind Projects (Mauritius) Ltd is marketing a USD benchmark 3.5NC2, with WAL of 3.36 years, senior Green bond (with second party opinion from Moody’s). 144A/RegS. Expected issue ratings: Ba2/BB by Moody’s/Fitch. The parent guarantor is Greenko Energy Holdings.

Initial price guidance is at 7.625% area.

Use of proceeds: The proceeds of the notes will be used for refinancing the US$750m 5.50% Senior Notes due 2025, for general corporate purposes and to subscribe for or loan the rupee debt to be issued or borrowed by Greenko AP01 IREP Private Limited (Pinnapuram SPSP Company). The Pinnapuram SPSP Company intends to use the proceeds of the rupee debt primarily to repay existing indebtedness, for capital expenditure in relation to the Pinnapuram standalone pumped storage project and to pay transaction expenses related to the rupee debt.

The company has been absent from the USD bond market since March 2022 when it placed the to be refinanced Apr 2025s. As a reminder the line priced at par to yield 5.50% having been tightened from IPG at 5.80% area. That was supported by >US$2bn orders at reoffer to give a cover ratio of 2.67x, while the NIC for that deal was ca. 11bps, IGM data shows. See the full distribution statistics here.

Prior to that in Dec 2021 the group placed a US$1bn 7NC3 Green bond which is included among the following list of official comps at 93.375 bid (6.772%), along with deals from ReNew Wind Energy and Continuum Green Energy.

The issuer is offering an eye-catching pick-up of ca. 85bps at IPG versus those 4.30% Mar 2028s while we see fair value on the new line to be in the 7.0-7.10% area.

That does appear to have helped garner interest as illustrated by the last update we received at ca. 12:00a.m. HKT/SGT when the book was over US$2.1bn (Incl. US$505m JLM interest).

** COMPS **

Source: Informa Global Market (IGM)

KNOC poised to launch its first USD offering of the year

In other primary news, comps have been revealed for the forthcoming issue from Korea National Oil Corporation (“KNOC”), rated Aa2/AA by Moody’s/S&P, which had previously mandated Citigroup, HSBC, ING, Mizuho, Standard Chartered Bank and UBS to arrange a series of fixed income investor calls that are due to wrap up today (20th Mar).

A USD-denominated 144A/Reg S senior unsecured offering with expected tenor(s) of 3-year FXD/FRN and/or 5-year FXD may follow, subject to market conditions.

Expected issue rating: Aa2/AA (Moody's/S&P). Timing: Pricing as early as 24 March, subject to market conditions.

The national oil and gas company of South Korea is a frequent issuer in the USD market, having raised a total of US$2.6bn in 2024 through two separate issues and a total of six individual tranches. This will mark their first US dollar-denominated offering this year, with the planned 3- and 5-year fixed and floating rate structure mirroring last year's two transactions.

Their most recent issuance was in September last year, when they sold a US$400m 4.125% 3-year fixed rate line, a US$300m SOFR+90 3-year floating rate note and a US$500m 4.25% 5-year fixed rate note. The deal was well received by investors, as seen from the >US$6.8bn of combined orders at reoffer, which equated to a healthy average cover ratio of 5.67x across the three tranches. See the full distribution statistics here.

That also allowed the issuer to lock-in some attractive funding at ca. 2bp inside its existing curve on the fixed-rate 3-year tranche, while pricing flat to the curve on the 5-year tranche. As a reminder, the US$400m 4.125% 30-Sep-2027 and US$500m 4.25% 30-Sep-2029 lines priced at reoffer spreads of T+72 and T+85, having been tightened from initial price guidance at T+105a and T+120a respectively.

Meanwhile, the US$300m SOFR+90 30-Sep-2027 floating rate tranche landed at SOFR+90 from SOFR equivalent.

** COMPS**

Source: Lead Managers

Based on the official comps above, an interpolation of the KOROIL 4.125% Sep-2027s and KOROIL 4.25% Sep-2029s implies that a theoretical new March 2028 fixed rate senior unsecured line would be in the T+57a. Meanwhile, an interpolation of the KOROIL 4.25% Sep-2029s and the KOROIL 2.625% Apr-2032 illustrates that a theoretical new March 2030 fixed rate senior unsecured line would be in the T+68a.

Source: Informa Global Markets (IGM)

Source: Informa Global Markets (IGM)

Source: Informa Global Markets (IGM)

Source: Informa Global Markets (IGM)

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