PolSolar raises HUF 69.6 bln with BGS bond issue

Green Energy

PolSolar raised HUF 69.6 billion from the sale of a security issued in the framework of the Bond Funding for Growth Scheme (BGS) of the National Bank of Hungary (MNB) at auction on Wednesday, data posted on the Budapest Stock Exchange website show.

PolSolar had offered HUF 64.5 bln of the 15-year bonds. Bids reached HUF 70.7 bln.

The average yield was 7%, 71 bp over mid-swaps.

Scope Ratings assigned the issue a B+ rating, the threshold for BGS participation.

Scope Ratings said PolSolar plans to use the proceeds to build five solar parks in northeast Hungary with a combined capacity of 233.5 MW. The solar parks must be commissioned by end-2023 to be eligible for the full tariff available in Hungary's feed-in tariff scheme, it noted.

Two Hungarian private equity funds, Voyager Private Equity Fund and Central European Opportunity Private Equity Fund, are sponsoring the project and have put up 25% of total investment costs.

Scope Ratings said MNB will subscribe the 15-year bond, while commercial investors will subscribe a second issue, up to HUF 7.4 bln, that will take place by the end of June 2022.

MNB has said it will wind up the BGS after its HUF 1.55 tln allocation runs out. The central bank had subscribed HUF 1.512 tln of BGS bonds by the end of March.

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