Foresight Group (Foresight), the England-headquartered infrastructure and private equity fund manager, is to issue a £60 million (€71 million; $93 million) solar bond, which will be listed on the London Stock Exchange and will be used to refinance its existing portfolio of UK solar assets.
The bond will be the largest solar bond issued to date in the UK. Independent Debt Capital Markets, a London-based debt services boutique, is acting as arranger and sole bookrunner.
A statement from Foresight said: “The index-linked revenue stream for UK solar assets offers institutional investors an attractive fixed income-like return given the current low yields of index-linked treasury gilts.”
Foresight has more than £310 million under management in the solar photovoltaic sector, with assets spanning the UK, Italy, Spain and the US. The firm says it will make use of “similar innovative financing structures” to further develop its solar portfolio across Europe and the US.
Ricardo Pineiro, an investment manager at Foresight, said the firm plans to invest a further £250 million into new large-scale, ground-based solar projects in the UK over the next 12 months. “We are finding growing appetite from both institutional and retail investors, who see solar power as a maturing asset class with an attractive risk profile,” he added.
In 2011, Foresight closed its Foresight Solar VCT (Venture Capital Trust) on £38 million and Foresight Solar EIS (Enterprise Investment Scheme) on £27.5 million. It has currently raised more than £30 million of a target £40 million from retail investors for investment in UK solar assets underpinned by the UK government’s Renewable Obligation scheme through its Foresight Solar EIS Fund 2 and Foresight Solar VCT C Shares.
The firm also has a European Solar JV platform, which includes participation from the likes of France’s CDC Infrastructure and Italy’s Generali Group, and solar PV infrastructure joint venture with Greentech Energy Systems in the US.