Brookfield Renewable to Issue C$400 Million of Green Bonds
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Insights
Brookfield Renewable's issuance of C$400 million in medium-term notes with a 5.318% interest rate represents a strategic move to secure long-term financing. This decision reflects the current interest rate environment and investor appetite for corporate debt. The 30-year term of the notes suggests a long-term horizon for capital projects or debt restructuring. The interest rate, slightly above the average for similar maturity corporate bonds, indicates a moderate risk perception among investors.
Investors should consider the potential impact on Brookfield Renewable's leverage ratios and interest coverage metrics. The additional debt may affect the company's balance sheet, but it also provides capital for growth or refinancing existing debt, possibly at a lower interest rate. This could lead to improved financial flexibility and potential expansion of renewable projects, which is in line with global trends towards sustainable energy investments.
It's crucial to monitor the company's subsequent financial statements to assess the impact of this debt issuance on its financial health and performance. The guaranteed backing by Brookfield Renewable and its key subsidiaries adds a layer of security for investors, potentially making these notes a more attractive investment.
The issuance of medium-term notes by Brookfield Renewable is indicative of the company's approach to capital management. By locking in a fixed interest rate for 30 years, the company is hedging against future interest rate volatility. This is particularly pertinent given the fluctuating rate environment influenced by global economic conditions and central bank policies.
Investors in the debt market should note the implications of the credit quality of Brookfield Renewable and its subsidiaries. The guarantee provided adds credibility to the issuance, which could influence the demand and secondary market pricing of these notes. Furthermore, the utilization of a base shelf prospectus suggests a pre-planned financing strategy allowing for timely market access, a sign of proactive financial management.
The long-term nature of the notes could appeal to investors seeking stable, long-duration income streams. However, the fixed rate also implies that investors are locked in, which could be a disadvantage if interest rates decrease substantially in the future. The credit spread over government securities will be a key determinant of the value proposition for these notes relative to other investment opportunities in the market.
This financial move by Brookfield Renewable can be seen as a reflection of the broader renewable energy sector's growth trajectory. The capital raised through the issuance of these notes may be allocated towards developing new renewable energy projects or enhancing existing infrastructure. This aligns with the increasing global demand for clean energy solutions and the transition away from fossil fuels.
Given the long-term commitment to renewable energy infrastructure, this debt issuance could signal confidence in the sector's stability and profitability. The interest rate of the notes provides insight into how the market currently values the risk associated with renewable energy investments. Stakeholders should consider how this capital injection might accelerate Brookfield Renewable's project pipeline, potentially increasing its market share and influence in the renewable energy sector.
It will be important to observe how this capital is deployed and the subsequent return on investment. The effective use of the funds could enhance Brookfield Renewable's competitive position and contribute positively to its stock performance, especially if it leads to increased operational capacity and revenue generation in the growing renewable energy market.
BROOKFIELD, News, Jan. 08, 2024 (GLOBE NEWSWIRE) -- Brookfield Renewable (NYSE: BEP, BEPC; TSX: BEP.UN, BEPC) (“Brookfield Renewable”) today announced that it has agreed to issue C
Brookfield Renewable Partners ULC, a subsidiary of Brookfield Renewable, will be the issuer of the Notes, which will be fully and unconditionally guaranteed by Brookfield Renewable and certain of its key holding subsidiaries.
The Notes will be issued pursuant to a base shelf prospectus dated September 8, 2023 and a related prospectus supplement and pricing supplement to be dated January 8, 2024. The issue is expected to close on or about January 10, 2024 subject to customary closing conditions.
The Notes will represent Brookfield Renewable’s twelfth green labelled corporate securities issuance in North America and the first issuance under Brookfield Renewable’s 2024 Green Financing Framework (the “Green Financing Framework”). Brookfield Renewable intends to use the net proceeds from the sale of the Notes to fund Eligible Investments (as defined in the Green Financing Framework), including to repay indebtedness incurred in respect thereof. The Green Financing Framework is available on Brookfield Renewable’s website and described in the prospectus supplement in respect of the offering.
The Notes have been rated BBB+ by S&P Global Ratings, BBB (high) with a stable trend by DBRS Limited and BBB+ by Fitch Ratings.
The Notes are being offered through a syndicate of agents led by CIBC Capital Markets, RBC Capital Markets, TD Securities, BMO Capital Markets, Scotiabank and National Bank Financial Markets, and including Desjardins, BNP Paribas, Mizuho Securities, MUFG, SMBC Nikko and iA Private Wealth Inc.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction, nor shall there be any offer or sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities being offered have not been approved or disapproved by any regulatory authority nor has any such authority passed upon the accuracy or adequacy of the short form base shelf prospectus or the prospectus supplement. The offer and sale of the securities has not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold in the United States or to United States persons absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws.
Brookfield Renewable
Brookfield Renewable operates one of the world’s largest publicly traded platforms for renewable power and decarbonization solutions. Our portfolio consists of hydroelectric, wind, utility-scale solar and storage facilities in North America, South America, Europe and Asia, and totals approximately 31,800 megawatts of installed capacity and a development pipeline of approximately 143,400 megawatts of renewable power assets, 14 million metric tonnes per annum (“MMTPA”) of carbon capture and storage, 2 million tons of recycled material and 4 million metric million British thermal units of renewable natural gas production annually. Investors can access its portfolio either through Brookfield Renewable Partners L.P. (NYSE: BEP; TSX: BEP.UN), a Bermuda-based limited partnership, or Brookfield Renewable Corporation (NYSE, TSX: BEPC), a Canadian corporation.
Brookfield Renewable is the flagship listed renewable power company of Brookfield Asset Management, a leading global alternative asset manager with approximately
| Contact information: | |
| Media: | Investors: |
| Simon Maine | Alex Jackson |
| +44 7398 909 278 | + (416) 649-8172 |
| simon.maine@brookfield.com | alexander.jackson@brookfield.com |
Cautionary Statement Regarding Forward-looking Statements
Note: This news release contains forward-looking statements and information within the meaning of Canadian securities laws. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Forward-looking statements can be identified by the use of words such as “will”, “expected”, “intend”, or variations of such words and phrases. Forward-looking statements in this news release include statements regarding the closing, the terms and the use of proceeds of the offering of Notes. Although Brookfield Renewable believes that such forward-looking statements and information are based upon reasonable assumptions and expectations, no assurance is given that such expectations will prove to have been correct. The reader should not place undue reliance on forward-looking statements and information as such statements and information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Brookfield Renewable to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information. Except as required by law, Brookfield Renewable does not undertake any obligation to publicly update or revise any forward-looking statements or information, whether written or oral, whether as a result of new information, future events or otherwise.
FAQ
What is the latest announcement from Brookfield Renewable (NYSE: BEP, BEPC; TSX: BEP.UN, BEPC)?
What is the interest rate on the newly issued medium-term notes by Brookfield Renewable (NYSE: BEP, BEPC; TSX: BEP.UN, BEPC)?
Who will guarantee the newly issued Notes by Brookfield Renewable (NYSE: BEP, BEPC; TSX: BEP.UN, BEPC)?
When is the expected closing date for the issuance of the Notes by Brookfield Renewable (NYSE: BEP, BEPC; TSX: BEP.UN, BEPC)?
