Adani Electricity Mumbai Limited (AEML) — an arm of Adani Transmission Ltd — will set up a $2-billion Global Medium-Term Notes bonds programme (GMTN).

The GMTN programme and the sustainability-linked bond issuance is the next step in AEML’s capital management plan, the company said in a statement Friday.

AEML also settled the maiden takedown of $300 million under the programme today, it said.

The order-book for the takedown was oversubscribed by 9.2 times by high quality real money global investors. The global geographical split of the investors was Asia – 49 per cent, Europe, West Asia, Africa – 27 per cent and North America – 24 per cent.

AEML services over 12 million consumers in Mumbai. It priced its first takedown of $ 300 million through 10-year notes under the 144A / REG S format.

Second phase

With this landmark transaction, AEML’s capital management plan enters the second phase with 100 per cent of the term debt being placed in the international capital markets with the overall maturity now increased to nine years, the company said.

“The challenging short-term targets of increasing the renewable energy penetration in AEML’s power purchase mix from the current three per cent to 30 per cent by 2023 and then 60 per cent by 2027 are legally covenanted targets which are consistent with the COP26 targets,” said Kandarp Patel, MD & CEO, AEML.

The transaction was closed on July 22 and the funds will be utilised for refinancing of existing debt and regulatory asset development for enabling ‘asset hardening’.

This becomes the tightest coupon ever by a BBB- rated utilities issuer in Asia (ex-Japan), company claimed.

This is the first Sustainability-Linked Bond (SLB) issuance from an Indian utility.

Sustainability framework

The assurance of the sustainability framework was completed through external agencies. Vigeo Eiris, a subsidiary of Moody’s Investor Service, provided a second party opinion on AEML’s sustainability framework.

The baselines for the targets have been assured by third party verifiers – British Standards Institute and the statutory auditor of AEML.

The Joint Lead Managers (JLM) to the transaction were Axis Bank, Barclays, Citigroup, DBS Bank, Deutsche Bank, Emirates NBD Capital, JP Morgan, Mizuho Securities, MUFG, and Standard Chartered Bank. MUFG acted as the sole advisor.

The JLMs were represented by Latham & Watkins and Cyril Amarchand Mangaldas. The issuer was represented by Linklaters and L&L Partners.