Greenko Group, a hydro and wind power generation company in India, on July 24 raised US$550 million through a bond offering using a unique structure seen for the first time in the Indian market.

The Reg S/144A five-year non-call three deal was priced at par with a similar coupon and re-offer yield of 8%, or at the tight end of the final price guidance of between 8% and 8.125%. The bonds, rated B by both Standard & Poor’s and Fitch Ratings, represented further diversification in the high yield space away from the usual Chinese issuers in the Asian G3 bond market.

Given the limited track record of the issuer, Greenko Dutch BV, the wholly-owned Dutch-domiciled subsidiary of Greenko, the transaction was marketed based on the projected performance of the borrower. Greenko Dutch adopted a unique transaction structure under which the proceeds of the new US dollar senior bonds will be used to subscribe to the Indian rupee bonds issued by a restrictive group of entities.

These restrictive entities own a total of 619MW of power assets and constitute 348MW operating wind power projects and an additional 36MW expected to be ready in July 2014 (for a total of eight projects across three states) and 235MW operating hydro power projects (for a total of 17 projects across two states).

Ahead of announcing the transaction, Greenko Dutch wall-crossed a select group of investors to discuss the deal structure and assess feedback. It met with the investors from June 27 to July 1 in Singapore, Hong Kong and London.

Following a positive response from the investor meetings, the company announced the transaction and embarked on a comprehensive global deal roadshow from July 15 to July 22 covering Singapore, Hong Kong, London, New York, Boston and Los Angeles.

At the end of the roadshow on July 22, the arrangers capitalized on the strong investor interest and released in US mid-day initial price thoughts at mid-8%. Following strong demand from high quality investors, a formal price guidance of 8.25% area was introduced on July 23 when London opened.

The order book continued to build strongly and by the start of the US session, it generated a total demand of US$1.4 billion. The arrangers then proceeded to announce a final price guidance of between 8% and 8.125%, eventually pricing the deal at the low end of the range.

In terms of geographic distribution, 39% of the bonds were sold in the US, 31% in Europe and 30% in Asia. Fund managers accounted for 90% of the paper, while the remaining 5% was sold to private banks and another 5% to pension funds.

Proceeds from the transaction, which is guaranteed by the Greenko Group, will be used primarily to refinance certain existing indebtedness and to repay an inter-company loan outside of the restrictive group. The rest will be allotted for general corporate purposes.

Deutsche Bank was the sole global coordinator for the transaction, as well as a joint bookrunner along with Barclays, Investec, J.P. Morgan and Standard Chartered.

Fitch says its rating on the bonds reflects the credit strengths and weaknesses of the debt structure and assets of the restricted group of companies. The restricted group is constrained by covenants to limit its cash outflows and any additional debt incurrence that would benefit the senior note holders of Greenko Dutch BV.

The notes will benefit from a first charge via the rupee-denominated bonds on all assets, excluding accounts receivables, and cash flows of the operating entities in the restricted group. The rating, Fitch adds, also indicates the absence of other prior ranking debt in the restricted group, aside from a standby working capital debt facility of US$30 million secured exclusively against accounts receivables.