Acwa Power’s maiden 144a-REGS Acwa 39 bond secures investment grade (BBB-) rating from Fitch
The Bond, issued in May 2017 by ACWA Power’s wholly owned DIFC-incorporated subsidiary, APMI1 One, is secured by cash flows and other security from a diversified cross-section of eight ACWA Power projects in Saudi Arabia
ACWA Power Investment & Management One Ltd. (“APMI One”) as the issuer is pleased to announce that Fitch Ratings (“Fitch”) has assigned the 814 MUSD 5.95% p.a. senior secured Bonds due 2039 (“ACWA 39”) a ‘BBB-‘ rating with a ‘Stable’ outlook.
The Bond, issued in May 2017 by ACWA Power’s wholly owned DIFC-incorporated subsidiary, APMI1 One, is secured by cash flows and other security from a diversified cross-section of eight ACWA Power projects in Saudi Arabia as well as from NOMAC, ACWA Power’s wholly owned operations & maintenance company.
Being strategically located in the western and eastern provinces of the Kingdom, each of these eight assets is critical to Saudi Arabia’s power and water infrastructure.
At the time of its issuance, ACWA 39 was the largest and the first investment grade private sector dollar bond offering by a private sector KSA company.
ACWA 39 carried two Investment Grade (“IG”) ratings assigned by both Moody’s and S&P until October 2019 when S&P rating was brought down by one notch as a result of S&P’s legal jurisdiction review of Dubai International Financial Centre (“DIFC”) , effectively creating a split-rating situation for ACWA 39.
With full confidence in the strength of underlying business fundamentals of ACWA 39’s portfolio, ACWA Power’s response has been to approach Fitch to obtain a new rating for the Bond. Following their review, Fitch publicly announced in February 2020 APMI One’s ACWA 39 Bond’s ‘BBB-‘rating with ‘Stable’ outlook.
“We are pleased to have fulfilled ACWA Power’s commitment to the Bondholders by fixing the split rating situation created by S&P’s jurisdiction-ranking action. Fitch’s IG rating reaffirms the robust structure and the debt-service quality of APMI One’s diversified portfolio,” said Rajit Nanda, Chief Investment Officer of ACWA Power
“ACWA 39 has provided us with the ideal launch platform for our upcoming project and corporate finance needs for which RegS/144A and other international issuances as well as those in Saudi Arabia’s Debt Capital Market will be our mainstay."
kashif Rana, Chief Financial Officer of ACWA Power said: “APMI One has maintained a stellar financial performance since the 2017 issuance, consistently outperforming the 2017 base case on an overall portfolio basis. Given our unwavering focus on optimization of operational performance as well as on value-addition, this is not at all a surprising outcome for us.”
APMI One’s ACWA 39 Bond currently has 2 IG ratings with Fitch’s “BBB-’ and Moody’s ‘Baa3’, both with ‘Stable’ outlook. Subsequently, APMI One has withdrawn related ratings with S&P.