Renewable Energy Finance: Orsted issues ~$2bn of green bonds to finance global buildout of renewable energy projects

published on 07 September 2022

Orsted has secured investor commitments for the senior, fixed-rate green bonds that were issued in three tranches. The company has issued €900 million of bonds with a coupon rate of 3.25% and maturity in 2031, under one tranche. Under two more tranches, it has issued £375 million of bonds with a coupon rate of 5.125% and maturity in 2034, as well as £575 million of bonds with a coupon rate of 5.375% and maturity in 2042. The bonds are listed on the Luxembourg Stock Exchange.

Since 2017, all new bonds issued by Orsted are under the green framework, with outstanding green bonds currently accounting for more than 70% of the company’s overall bond portfolio. In 2022, Orsted expanded the scope of its green financing framework beyond offshore wind projects to include onshore wind and solar PV assets as well. Total bond issuances account for 82% of the company's gross debt of $7.6 billion (as of June 30th, 2022), the majority of which is scheduled to mature between 2030 and 2034.

Orsted’s financing strategy is focused on tapping the corporate market instead of the project finance markets, as it views the former as more stable and predictable. The average cost of debt for the company has decreased from 3.8% in 2018 to 2.6% in 2022. Apart from green bonds, the company has financed its activities through bank loans and subordinated hybrid capital instruments. Besides the outstanding green bonds, Orsted additionally has a $840 million green revolving credit facility (RCF) to support the construction of its offshore wind projects in Taiwan.

 The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.

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