(Adds detail on convertible bond consent solicitation)
By Robert Smith
LONDON, Sept 29 (IFR) - Abengoa has raised a new project bond to refinance a bridge loan from US hedge fund Elliott Management taken out two years ago to fund its Solaben 1 and 6 solar projects.
The Spanish energy firm also moved forward with its plans to change the guarantees on its convertible bonds on Tuesday.
A special purpose vehicle called Solaben Luxembourg priced a 285m 3.758% December 2034 amortising bond on Friday via Santander, Citigroup and Credit Agricole. Standard & Poor’s rates the bond BBB.
Santander and Credit Agricole are both underwriters on the company’s upcoming 650m rights issue, as well as lenders to its syndicated loan facility. Citigroup is also a lender to this facility and led the company’s last equity placement.
The bond is yet to settle but Abengoa has repaid Elliott, according to a source.
The project bond suggests the company’s recently announced underwriting commitments for its equity capital raise have eased pressure on its ability to raise non-recourse financing against its assets.
Abengoa is selling Solaben 1 and 6 to its US-listed yieldco Abengoa Yield.
IFR reported on Friday that Abengoa was seeking to refinance the Elliott loan, which some investors thought could be problematic given that the Spanish energy firm’s corporate bonds continue to trade at deeply distressed levels.
Abengoa’s 375m 7% 2020 bond slumped to a cash price of 37.50 on Tuesday morning, equating to a yield of 39%. The bond traded as high as 58 after the company announced details of its rights issue last Thursday.
On Tuesday the company announced a consent solicitation to holders of its 250m 4.50% 2017 convertible, 400m 6.25% 2019 convertible and US$279m 5.125% exchangeable notes.
Abengoa is seeking noteholders’ consent to provide the debt with the same level of guarantees as its high-yield corporate bonds. Holders have until October 26 to deliver their consent.
The company originally announced the planned guarantee changes on July 23, a week before it dramatically slashed free cashflow guidance on the back of higher-than-expected capex charges in Brazil.
At the time Abengoa said the move was to stop investors taking “irrational positions” on its credit default swaps. But the cost of insuring the company’s debt against default has ballooned over the past two months.
Abengoa’s five-year CDS was bid at an upfront cost of 28.75% before the changes were announced on July 23. It is now quoted at 70.5%. (Reporting by Robert Smith, editing by Alex Chambers, Julian Baker)