Canadian Solar has Completed its Second Green Project Bond Placement in Japan
November 22, 2017
Canadian Solar Inc.has announced the completion of its second green project bond placement with Goldman Sachs Japan Co., Ltd. The JPY7.4 billion ($66.0 million) dual-tenor green project bond was issued to finance Canadian Solar’s 27.3 MWp Tottori Solar Power Plant in Tottori Prefecture, Japan. The Tottori solar power plant achieved commercial operations in August 2017, and the electricity generated is currently being purchased by the Chugoku Electric Power Company, Inc. under a 20-year feed-in-tariff contract at the rate of JPY40.0 ($0.36) per kWh.
The Tottori green project bond consists of a dual-tenor maturity of 1.5 years and 18.3 years, representing the initial and extended tenor respectively, within a single-tranche of the bond. This dual-tenor structure makes full repayment of the bond flexible, while enabling a potential sale of the solar power plant to Canadian Solar Infrastructure Fund, recently listed on the Tokyo Stock Exchange.
The Japan Credit Rating Agency, Ltd. (“JCR”) assigned the Tottori project an investment grade rating of “A”, making it the fourth project by Canadian Solar in Japan to receive such a rating and in line with the highest ratings reported in the Japan PV sector. Furthermore, the Japan Research Institution, Limited (“JRI”) independently certified the designation as a green bond, in accordance with the Green Bond Principles (2016) published by the International Capital Market Association (“ICMA”). The asset-backed, non-recourse bond was issued at par and pays a fixed coupon of 1.2725% per annum during the initial tenor and, if extended at the option of Canadian Solar, 1.3113% per annum thereafter. Goldman Sachs Japan Co., Ltd. acted as the bond arranger and Hitachi Capital Trust Corp., was appointed as trustee.
Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar Inc. commented, “We are very proud to announce the issuance of a second dual-tenor green project bond at a low coupon rate. This solidifies our position as the leading international issuer of green project bonds in Japan. Investors recognize our strong record of building high quality and bankable solar power projects. This project will contribute to the growth of Canadian Solar Infrastructure Fund as a leading renewable energy fund in Japan. We will continue to look for opportunities to promote renewable energy platform in this market.”
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