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Centerbridge in landmark €400m of ‘acquisition’ green bonds

The green bond issue, if it goes ahead, could be a first of its kind transaction to back an acquisition.

German wind turbine manufacturer Senvion is planning to issue €400 million of five-year green bonds to help fund its €1 billion acquisition from Suzlon by private equity firm Centerbridge Partners,  low carbon energy investor, PDI's sister title, reported.

The green bonds will be used with €180 million in debt from a cash liquidity facility. Equity will come from the circa $4 billion Centerbridge Capital Partners II fund and the roughly $6 billion Centerbridge Capital Partners III fund, although the actual amounts to be invested were not disclosed.

Sean Kidney, chief executive of non-profit Climate Bonds Initiative, said he wasn’t aware of any green bonds having been issued to date to fund company acquisitions. But he added that the kind of assets on Senvion’s balance sheet would probably qualify for a green bond issue, although he stressed he hasn’t seen documentation related to this particular issue.

Indian turbine manufacturer Suzlon sold German subsidiary Sevion to Centerbridge in a €1 billion all-cash deal earlier this year. The sale was at a discount from the €1.4 billion Suzlon spent buying Sevion in 2007.

In addition to the €1 billion in cash, Suzlon can net a further €50 million from the sale, depending on Senvion’s performance. It will also get a number of offshore technology licences to use in the Indian market.

Following the deal, Centerbridge managing director Stefan Kowski stated “the global market environment for renewable energies is promising for a wind turbine manufacturer, particularly for one of the most experienced players in the industry with onshore and offshore capability”.