Convertible Solar Bonds: Trina, SunPower Stoke Fire; Ascent Descends
by Sean Kidney
Trina’s $150m 3.5% 5yr convertible solar bond
In June Chinese solar manufacturer Trina announced the private placement of $150m of 5 year, 3.5% convertible bonds to “institutional investors” (no details provided). Trina weren’t clear how they would use the proceeds, but they are planning to build 400-500MW of solar plants over the rest of this year. Book-runners were Deutsche Bank, Barclays, J.P. Morgan and Goldman Sachs (Asia), with co-manager HSBC.
SunPower issues $400m 7yr 0.875% (!) convertible solar bond
That same month SunPower announced a private placement of $400 million, 7 year, 0.875% senior convertible bonds. What a great interest rate! Being 60% owned by Total may have helped; and then Total bought $250m of the bonds. Proceeds were for debt paydown, working capital and projects.
Then $32m Ascent 8% convertible solar runs into problems
Two weeks ago US thin-film solar developer Ascent Solar Technologies [ASTI] announced it was issuing $32 million of 8% convertible loan notes via private placement with institutional and other investors. Ascent is also owned by a Chinese company, TFG Radiant; it used to be controlled by Norsk Hydro.
A week later they announced it wasn’t happening after all – they’d been unable to get the permissions of one of their lenders and had to instead go for a much smaller ($4m) stock placement deal. Bummer!
Solar Power Inc issues a small convertible bond, but it’s converted 3 wks later. Hmmm.
In mid-July US PV developer SPI Solar (Solar Power Inc), a subsidiary of China’s troubled LDK Solar [LDKSY], one of the world’s largest solar PV companies, announced it had made a private placement of “common stock and convertible bond” for an aggregate $21.75 million to four investors. Proceeds to be used as working capital and to pay down debt.
We noted this as we generally count convertible bonds in our broader “Bonds and Climate Change” universe. At the time SPI didn’t specify the breakdown of stock and bond; but today it announced one of the investors had already converted their bond - a mysterious Hong Kong shelf company Robust Elite Limited. Geez, that was quick. Perhaps it’s something to do with LDK Solar’s re-structuring with the help of a company part-owned by China’s Xinyu City Government – where LDK is based in fact.
Environmental-Finance’s Peter Cripps reports that more convertibles look likely.
(He amusingly quotes a banker: “The markets are very like sheep – if one sees a rival doing something they immediately look at it and think should we do the same.” That BTW is one of the rationales for promoting a green bonds market.)
——— Sean Kidney is Chair of the Climate Bonds Initiative, an "investor-focused" not-for-profit promoting long-term debt models to fund a rapid, global transition to a low-carbon economy.