NRG Yield offers $400m in bonds

NRG Energy chief executive David Crane

NRG Energy chief executive David Crane

NRG Yield, the yieldco launched by NRG Energy onto the New York Stock Exchange last summer, has announced plans to issue $400m of green bonds, following its recently announced share issuance.

The transaction will be conducted through NRG Yield Operating LLC, an indirect subsidiary of NRY Yield, which will offer $400m worth of senior unsecured notes due in 2024.

NRG Yield’s announcement comes only a week after it said it would issue as many as 12.1 million new Class A shares, since priced at $54 a pop.

Together, the sale of the green bonds and the share issuance would be worth up to $1.05bn, much of which will go towards NRG Yield’s acquisition of the 947MW Alta Wind facility in California, the largest in North America.

The issuance of green bonds directly by companies is on the rise, following years where most such instruments – investment-grade bonds linked to green assets like renewables – were issued by multilateral institutions such as the World Bank.

As much as $20bn worth of green bonds were sold in the first half of 2014 alone, compared to $3bn for the whole of 2012. The boom reflects the growing interest of investors in gaining exposure to asset classes like renewables.

NRG Yield says that neither the green bond sale nor the share issuance are contingent on the Alta Wind deal going through. In the event it does not, money from the green bonds would be spent on “future acquisitions of eligible green projects”.

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