DIY Investor Magazine
/
December 2015
19
Instead, the programme is amended or supplemented
on an on-going basis, including at the time of each
issue. For an issuer such as Indian Solar Energy PLC
the establishment of a programme becomes very cost
effective, and shortens the time it takes to bring an
issue to market.
It is not unusual to have a newly formed company as
the Issuer, with a loan between them and a guarantor
who actually uses the proceeds of the issue. The issuer
has no assets other than the loan agreement and the
collateral pledged to cover the loan.
In this instance, the collateral includes a pledge of all
the outstanding shares of the Borrower and appropriate
negative covenants ensuring 100% indirect ownership
and control of the Lead Assets, which are the Dubbak
Solar Projects Pvt. Ltd, and the Medack Solar Projects
Pvt. Ltd
•
Dubbak has leased approximately 27 acres of land
from the firm contracted for doing the engineering,
procurement and construction (EPC) works of the
9.20MWp project in Telangana State
•
Medak will own 39 acres of land and has executed
an EPC contract for the development and
construction of a 8.24MWp solar power project.
All the documentation and the economic details of this
issue can be found at
Beaufort will continue bringing such issues to market
next year in an effort to achieve a broader retail bond
market, with an increasing supply, whilst maintaining
the standards of transparency and disclosure referred
to at the beginning of this article.
Low interest rates in recent years have made the hunt
for yield more difficult. Whilst 2016 does appear to be
the year when interest rates finally start to rise, there is
expectation that the “new norm” for rates will be lower
than in years gone (1) by, reflecting the low inflation
environment we are currently experiencing in-spite of
all the global quantitative easing. Dividends have, for
many years, been a very good source of income for
investors, however recent reductions by firms such as
Tesco, Standard Chartered, and Rolls Royce endorse
what should be known; dividends cannot be relied
upon to provide a fixed level of income.
In conclusion, we hope that our efforts will allow
investors to access a wider universe of bonds, which
have a high level of disclosure and transparency,
enabling investors to further diversify their portfolios.
DIVIDENDS CANNOT BE RELIED UPON TO PROVIDE A
FIXED LEVEL OF INCOME
