Milbank LLP advised Credit Suisse, DBS Bank, Deutsche Bank and Barclays as joint bookrunners in connection with the dual-tranche issuance of US$1.1 billion in senior secured green bonds. The bonds were co-issued by Star Energy Geothermal Darajat II Limited and Star Energy Geothermal Salak Ltd., subsidiaries of PT Barito Pacific Tbk that are operated by Star Energy Geothermal Group, Indonesia’s largest geothermal producer. The issuance is the first investment grade green project bond from the private sector in Indonesia.
The multi-jurisdictional transaction included the issuance of $320 million 3.25% guaranteed senior secured notes due 2029 and $790 million 4.85% guaranteed senior secured notes due 2038. Both tranches will be listed on the Singapore Exchange Securities Trading Limited.
Star Energy operates the Darajat and Salak geothermal plants in West Java, Indonesia and have 271MW and 337MW, respectively. The proceeds from the offering will be used to refinance existing loans and for general corporate purposes related to geothermal operations.
This 2020 green bond offering is the largest ever raised by the Star Energy Geothermal Group and was 3.5 times oversubscribed, despite challenging market conditions created by the COVID-19 pandemic.
Partners Jacqueline Chan and Jim Grandolfo led the Milbank team, which included Asia Practice managing partner David Zemans and Global Project, Energy and Infrastructure Finance Group partner James Orme. The team also included Capital Markets associates York Wu and Cheyne Cudby (Hong Kong), Hua Chan (Singapore) and Tax associate Benjamin Heller (New York).
Ms. Chan said: “This successful green bond offering is incredibly significant not just for Star Energy, but for the sustainable energy sector more broadly, as it indicates that investors in the region and across the world are eager to invest in geothermal and renewable energy projects amid challenging economic circumstances. We are thrilled to have represented the bookrunners in this transaction and look forward to continuing to advise clients in the region as investor interest in sustainability financing continues to grow.”
Milbank advised Star Energy Geothermal (Wayang Windu) Limited on its US$580 million green bond issued in 2018 and has continuously been at the forefront of green financing transactions, regularly representing clients throughout Asia on cutting-edge, first-of-their-kind green bond issuances, including advising on AC Energy’s inaugural green bond issuance, Bank of the Philippines issuance of CHF100 million ASEAN green bonds (the first-ever public Swiss franc-denominated benchmark bond to be issued out of the Philippines), and BPI’s issuance of US$300 million ASEAN green bonds (the first United States dollar-denominated ASEAN green bond to be issued by a Philippine bank).
The transaction closed on October 14, 2020 and is subject to regulatory approvals.
