Snippets: God I love engineers / Summer bonds: Acciona’s $300m Mex wind bond & Utah $92m wind bond / Air Liquide bond x6 oversubscribed / WB Green Bond reporting

> God I love engineers! I’m beside the River Liffey in Dublin to speak at the International Conference on Ocean Energy. The marine engineering being discussed here is amazing – huge underwater tidal turbines, wave-catchers of all sorts, a cool Norwegian underwater “sail”. Bits of test kit are all over the place, like a giant Mechano game. It breathes innovation. All still pre- or near-commercial stage, so not exactly bonds yet, but definitely hope.

> Catch-up: there were a couple of notably bonds over the summer.

In Mexico, the Oaxaca II and IV 18 year wind bonds finally got a deal off the ground about a month after opening. The bonds were issued by Spanish developer Acciona and, combined, amounted to a $300m issuance. Rating by S&P and Fitch is BBB ‘stable’. Investors are guaranteed a minimum return of 7.25% on the bonds.

Take-up was initially slow. Acciona said this was because of the difficulty in selling project finance transactions in the capital markets at present and the small size of each bond (each tranche ≈ $150m) which is seen as inherently illiquid – a big issue at the moment.

Acciona had originally priced the bonds at 6.5%, which they thought looked good against the 3.20-3.10% seen on recent bonds from state controlled electricity company Comision Federal de Electricidad; but in the end they had to raise that by 75 basis points (bp) before the deals were closed.

According to a report by Reuters, Latin American energy bond spreads have generally been narrowing and this, arguably, could happen in Mexico once investors grow more comfortable with the sector and deals grow in size.

In the USA, Utah Associated Municipal Power Systems issued nearly $92 million of revenue bonds for a wind project (Horse Butte) that began operations recently in Idaho. According to Reuters, the debt includes $67.9m of Series A bonds which have an A-minus rating from S&P and Fitch, a 2032 maturity date, 5% coupons and yield of 3.49%. Series B bonds ($23.97m) have a A-plus rating from S&P, a 2032 maturity a variable-rate. > Read more

> In contrast to Acciona’s travails, last week’s Air Liquide asset-linked SRI bond was 6x over-subscribed. That should inspire some copycats.

EuroWeek reports that there were 230 investors from: France 29%, Germany and Austria 25%, UK 20%, Benelux 13%. Fund managers took 67%, banks 10%, insurance companies 9%, pension funds 7% and a couple of central banks 2%. Bookrunners Credit Agricole (structurer), HSBC, Citi and Society Generale priced the bond at 57bps over swaps. By Thursday the bond was trading at 54Bps over swaps.

> The World Bank recently put out their 2013 annual report on their Green Bonds. >Read the report