A 5.25% interest opportunity in green energy: Considerable value proposition from the newly launched wind and solar bond.
Let's Dive into Energiekontor's Sustainable Bond: What's the Score?
Got your eyes set on Energiekontor's sustainable bond with its appealing 5.25% coupon? Well, before you jump in, let's take a honest, unfiltered look at its safety.
Based in Bremen, Energiekontor, a veteran in the renewable energy sector for over three decades, owns and operates wind and solar projects in countries like Germany, UK, France, Portugal, and the USA. Currently, the company operates 39 parks with a total capacity close to 400MW, and an additional 220MW under construction, shooting for an overall capacity of over 610MW soon.
To fuel its expansion, Energiekontor has decided to sell a sustainable bond. According to the company, the purpose is to diversify its financing methods by using the funds to finance wind and solar projects in Germany and international markets like the UK, France, Portugal, and the USA. The bond has a maturity date of February 1, 2032, with an annual interest coupon of 5.25%. The bond's current yield is 4.3%, which may drop down to 2.3% if the company decides to redeem the bond early on November 30, 2026. To join the green revolution, you'll need a minimum investment of 3,000 euros, with the option to invest more in increments of 1,000 euros. Don't rush to fill out those forms just yet, as the relatively low emission volume stands at 20 million euros, calling for some smart investments.
Good to Go? Not So Fast...
At the moment, there is no official bond rating. However, analysts are optimistic about the company's potential. Despite encountering delays in 2024, which caused profits of 40 to 45 million euros to be pushed to the current or even next year, almost all analysts continue to project higher price targets for Energiekontor's stock. These analysts anticipate that the projects will ultimately boost the company's results. Such delays are nothing new in the industry, as projects often span several years.
In January, Energiekontor received new construction permits for four wind farm projects with a total capacity of 220MW in Scotland and Germany. By 2028, the company is expecting earnings before interest and taxes (EBIT) of 120 million euros. The new federal government could help tackle bureaucratic hurdles in building wind and solar plants and speed up the grid expansion process.
The improved company quality can be seen in the bond's attractive coupon, which is quite an improvement from the 7% Energiekontor paid for its bonds ten years ago. Essentially, investors get a double dose of sustainability: one, in terms of funding renewable energy, and two, in terms of returns. In case the company redeems the bond early, the return will still be at a reliable fixed deposit level.
For additional insights on Energiekontor's financial performance, potential project delays, and recent reporting issues, check out our full analysis here.
Worth noting: The weekly premium edition of BÖRSE ONLINE featured this article here. Alternatively, you might also discover insights on special assets in our piece, "Political Scientist's Brutally Honest Take: "We Need a Miracle Now"".
- Despite some delays and recent reporting issues, analysts remain optimistic about Energiekontor's potential, with many projecting higher price targets for its stock due to anticipated boosts from ongoing renewable energy projects.
- By utilizing funds from its latest sustainable bond, Energiekontor aims to finance wind and solar projects not only in Germany, but also in international markets like the UK, France, Portugal, and the USA, diversifying its financing methods within the renewable-energy industry.
- An appealing aspect of Energiekontor's sustainable bond is the double dose of sustainability it offers to investors: not only will they be funding renewable energy projects, but they will also receive a competitive 5.25% coupon, an improvement from the 7% the company paid ten years ago.
