Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
The Status of the Yieldco
 Tom Konrad Ph.D. CFA
History
What is a YieldCo
Importance and Purpose
Common YieldCo features
...
Tom Konrad Ph.D., CFA
Editor,
Freelance writer
Hedge fund focused on green economy.
Head of research.
Green Global Equity ...
Disclosure
Tom Konrad, The Green Global Equity Income
Portfolio, and/or the JPS Green Economy
Fund own the following secur...
Disclaimer
Past performance is not a guarantee or a reliable
indicator of future results. This presentation contains
the c...
What Is A Yieldco?
 Developer perspective: A way to raise
(cheap) equity capital for clean energy
projects
 Investor per...
What isn't a Yieldco?
IPO Timeline: North American
Yieldcos
What Is A Yieldco
 A Yieldco...
 Raises capital in public markets
 Generates most of its cashflow from clean
energy own...
What Parts of the ”Yieldco Model”
Will Survive?
 Public Company
 Owns Clean Energy
Assets
 Uses most cashflow
for distr...
Contagion: All In The Family
The Sponsor Effect
The Sponsor Effect
Yieldcos With Internal
Development See Opportunity
 Brookfield
Renewable Energy
Partners (BEP)
 We're very
different
 O...
Yieldcos With Private Sponsors
Expect To Stand Out
Pattern Energy Group
(PEGI)
Volatility in Yieldco
sector is very health...
Yieldcos With Solvent Sponsors:
'The Model Works For Us'
 NextEra Energy
Partners (NEP)
 The Yieldco
model can
work with...
Yieldcos With Solvent Sponsors:
Continuing As Planned
TransAlta Renewables
(TSX:RNW)
– Will continue asset
drop-downs
– 'S...
Abengoa (ABGB) Seeks Creditor
Protection: Trouble for Abengoa
Yield (ABY)
 Some project debt has cross-default clauses
wh...
SunEdison Grabs Control at TERP
and GLBL
 November 25th:
 SUNE replaces TERP & GLBL CEO, CFO,
Chairman, and members of C...
GLBL Cash Rescues SUNE- Is it
good for GLBL?
 November 26
 GLBL Acquires 425 MW of Indian solar
farms for $0.51/W plus a...
Implications for Terrafrom
Power/Global shareholders
 Less oversight of conflicts of interest
 Weaker balance sheets and...
Predictions for Future Yieldcos
 More focus on yield - less on growth.
 Yieldcos will be one of many capital raising
opt...
What's Coming
 Italy: Enel buying back Yieldco
 China: Canadian Solar Yieldco IPO
 Weak sponsor, needs cash
 Unlikely ...
Questions?
 Tom Konrad Ph.D. CFA
 tom@altenergystocks.com
Upcoming SlideShare
Loading in …5
×

The Status of the Yieldco

13,842 views

Published on

An overview of what it happening in the Yeildco space because of the sector downturn and the near insolvency of Yieldco sponsors SunEdison (Terraform Power and Terraform Global) and Abengoa (Abengoa Yield.) Delivered at Yieldcon in NYC on December 3rd.

Published in: Business
  • Dating for everyone is here: ♥♥♥ http://bit.ly/2ZDZFYj ♥♥♥
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Dating direct: ♥♥♥ http://bit.ly/2ZDZFYj ♥♥♥
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Paid To Write? Earn up to $200/day on with simple writing jobs. ●●● https://tinyurl.com/vvgf8vz
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • DOWNLOAD FULL BOOKS, INTO AVAILABLE FORMAT ......................................................................................................................... ......................................................................................................................... 1.DOWNLOAD FULL. PDF EBOOK here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. EPUB Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. doc Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. PDF EBOOK here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. EPUB Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. doc Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... ......................................................................................................................... ......................................................................................................................... .............. Browse by Genre Available eBooks ......................................................................................................................... Art, Biography, Business, Chick Lit, Children's, Christian, Classics, Comics, Contemporary, Cookbooks, Crime, Ebooks, Fantasy, Fiction, Graphic Novels, Historical Fiction, History, Horror, Humor And Comedy, Manga, Memoir, Music, Mystery, Non Fiction, Paranormal, Philosophy, Poetry, Psychology, Religion, Romance, Science, Science Fiction, Self Help, Suspense, Spirituality, Sports, Thriller, Travel, Young Adult,
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here

The Status of the Yieldco

  1. 1. The Status of the Yieldco  Tom Konrad Ph.D. CFA History What is a YieldCo Importance and Purpose Common YieldCo features Yieldco Assets Benefits and Drawbacks
  2. 2. Tom Konrad Ph.D., CFA Editor, Freelance writer Hedge fund focused on green economy. Head of research. Green Global Equity Income Portfolio A seed fund with a dividend income strategy and a 2 year track record. Currently talking to potential sponsors about turning it into a mutual fund. Portfolio Manager.
  3. 3. Disclosure Tom Konrad, The Green Global Equity Income Portfolio, and/or the JPS Green Economy Fund own the following securities discussed:  US: BEP, EVA, HASI, PEGI, NYLD/A, GLBL, CAFD, ABY, TERP  Canada: CSE, RNW, AQN, INE
  4. 4. Disclaimer Past performance is not a guarantee or a reliable indicator of future results. This presentation contains the current opinions of the author and such opinions are subject to change without notice. This presentation is intended for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.
  5. 5. What Is A Yieldco?  Developer perspective: A way to raise (cheap) equity capital for clean energy projects  Investor perspective: A company that pays a (usually) high dividend based on cash flow from clean energy assets.
  6. 6. What isn't a Yieldco?
  7. 7. IPO Timeline: North American Yieldcos
  8. 8. What Is A Yieldco  A Yieldco...  Raises capital in public markets  Generates most of its cashflow from clean energy ownership  Distributes most of its cashflow to investors.  Funds clean energy projects with low-cost capital from income seeking public investors.
  9. 9. What Parts of the ”Yieldco Model” Will Survive?  Public Company  Owns Clean Energy Assets  Uses most cashflow for distributions Has developer sponsor(s) Right of first offer (ROFO) on projects High dividend growth rate
  10. 10. Contagion: All In The Family
  11. 11. The Sponsor Effect
  12. 12. The Sponsor Effect
  13. 13. Yieldcos With Internal Development See Opportunity  Brookfield Renewable Energy Partners (BEP)  We're very different  Opportunity set will get better Hannon Armstrong Sustainable Infra. (HASI) Pullback is an opportunity May allow higher returns on investment
  14. 14. Yieldcos With Private Sponsors Expect To Stand Out Pattern Energy Group (PEGI) Volatility in Yieldco sector is very healthy Enviva Partners LP (EVA) We expect to execute... and differentiate Enviva from the rest of the pack.
  15. 15. Yieldcos With Solvent Sponsors: 'The Model Works For Us'  NextEra Energy Partners (NEP)  The Yieldco model can work with the right structure and a world class sponsor. 8point3 Energy Partners (CAFD) Both sponsors commited to dropdowns. No need to issue new equity.
  16. 16. Yieldcos With Solvent Sponsors: Continuing As Planned TransAlta Renewables (TSX:RNW) – Will continue asset drop-downs – 'Stable & moderate growth' – Announced 2nd ROFO on Nov. 23. NRG Yield (NYLD) Investment proposition unchanged. Continue to target 15% DPS growth
  17. 17. Abengoa (ABGB) Seeks Creditor Protection: Trouble for Abengoa Yield (ABY)  Some project debt has cross-default clauses which may be triggered.  US DOE can restrict distributions from Solana & Mojave solar projects.  Spanish insolvency law may lead to reexamination of intercompany transactions – were valuations fair?
  18. 18. SunEdison Grabs Control at TERP and GLBL  November 25th:  SUNE replaces TERP & GLBL CEO, CFO, Chairman, and members of Corporate Governance and Conflicts Committees  Conflicts committee members resign – 'unable to protect interests of stockholders'  GLBL will focus on acquisitions from SUNE
  19. 19. GLBL Cash Rescues SUNE- Is it good for GLBL?  November 26  GLBL Acquires 425 MW of Indian solar farms for $0.51/W plus assumed debt from SUNE  The projects replace 'lower yielding' planned acquisitions from initial portfolio, which have been cancelled.  SUNE uses cash to pay down margin loan.
  20. 20. Implications for Terrafrom Power/Global shareholders  Less oversight of conflicts of interest  Weaker balance sheets and credit ratings as capital is used to support SunEdison  Potential to acquire cheap assets from desperate seller.
  21. 21. Predictions for Future Yieldcos  More focus on yield - less on growth.  Yieldcos will be one of many capital raising options.  More independent Yieldcos, multiple & private sponsors (BEP, HASI, CAFD, PEGI)  Yieldcos with weak/highly leveraged sponsors will trade at significant discount.
  22. 22. What's Coming  Italy: Enel buying back Yieldco  China: Canadian Solar Yieldco IPO  Weak sponsor, needs cash  Unlikely to succeed  India: Sebi considerling Yieldco
  23. 23. Questions?  Tom Konrad Ph.D. CFA  tom@altenergystocks.com

×