Parent of reinsurance giant Hannover Re, The Talanx Group has been revealed as the lead investor for the financing of nine operational photovoltaic (PV) solar parks located in southwest Spain, with financial guarantee being provided by Assured Guaranty (Europe) plc (AGE).
The financing further expands Talanx’s sustainable investment activities and, the transaction is the first European wrapped bond in the solar energy sector, with further deals expected to follow.
The 19-year fixed-rate bonds secured low long-term rates and were issued privately to a group of European investors led by Talanx, alongside a number of South Korean investors.
AGE, a division of Assured Guaranty, has provided the financial guarantee for the bonds. AGE has guaranteed principal and interest payments on around €207 million (USD 232 million) of bonds issued on June 18th, 2019 by Izcalli Investments, S.A.U, which is majority owned by Q-Energy Group.
The portfolio is made up of nine PV solar plants that are spread cross the Seville and Huelva provinces in southwest Spain.
AGE Managing Director, Dominic Nathan said: “As the first wrapped issuance in Spain post financial crisis, this transaction is significant for the Spanish bond market, as well as for AGE. We are delighted to return to both Spain and the renewable energy sector by providing our financial guarantee to one of Europe’s leading PV Solar players.
“We expect to replicate this success with further transactions taking advantage of our long-term and cost-effective funding solution.”
In light of the financial guarantee provided by AGE, the amortising bond has been assigned an AA (stable) credit rating by S&P, while the underlying project is rated BBB.
AGE Chief Executive Officer (CEO), Nick Proud, added: “This is the largest renewable energy transaction that Assured Guaranty has guaranteed, and we expect it to be the first of a number of further Assured Guaranty wrapped issuances in the Spanish Solar sector in the coming months.
“It evidences AGE’s ability to innovate and add value in new markets. We are pleased that our AA wrap continues to attract investors in both Europe and Asia.”