Samsung Sec debuts in US solar farm debt deal with $67 mn underwriting

Samsung Securities Co. Ltd., a top South Korean brokerage company, has underwritten $66.7 million in senior debt to fund a solar power plant acquisition in California, in its first debt financing deal for a US solar farm project.

Samsung, part of the country’s largest conglomerate Samsung Group, lagged behind smaller domestic rivals such as Hana Financial Investment Co. Ltd. in debt finance arrangement for overseas power projects and aircraft leases.

Now it is actively marketing the senior debt to South Korean institutional investors, offering annual returns of the mid-4% range for a 20-year period, according to South Korean investment banking sources on Sept. 24.

Swiss-based asset manager Capital Dynamics raised a total of $236 million in debt to finance its purchase of Mount Signal 3 Solar Project from 8minutenergy Renewables, a US solar power developer, in July.

The rest of the debt was acquired by a group of global investors, including insurance firms.

The power project, located in Imperial Country, California, is the third phase of the 800 MW Mount Signal Solar Farm, which is among the largest photovoltaic projects in the world.

The 328 MW third phase of the project is expected to begin commercial operations by the end of 2018. Southern California Edison signed a 20-year power purchase agreement with the facility.

Samsung Securities has been stepping up efforts to develop a range of alternative investment products with new hires since the start of this year.

“We will aggressively go after global real estate, aircraft finance and energy infrastructure deals,” Samsung Securities’ Chief Executive Yong-am Yoon said in an aircraft investment conference held in Seoul earlier this year.

So far this year, Hana Financial Investment has underwritten $40 million in secured debt to fund Capital Dynamics’ purchase of two solar power plants in Monterey, California, following the $75 million underwriting of senior debt to finance Capital Dynamics’ acquisition of a US solar power plant in Nevada.

suji@hankyung.com