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Trust Insider: Bluefield Solar fund overshadowed by smallprint concerns
by James Carthew on Oct 30, 2013 at 13:28
Trig’s board is talking now about investing in additional generating capacity, with a particular focus on UK-based solar projects. They say this will be funded either with debt or, if appropriate, with fresh equity finance.
Both BSIF and Trig can gear themselves up – BSIF has a limit of 50% of gross assets with the gearing either at the level of the special purpose vehicle’s (SPVs) that hold the individual projects or at the level of the holding company.
Trig’s limit is 30% at the holding company level and 50% of gross asset value within the SPVs.
The debt at SPV level has the benefit of being non-recourse to the holding company.
I concluded last week that UKW was probably an okay investment but I cautioned that investors needed to be mindful of the risk of a change in government policy towards renewables and the likely direction of electricity prices.
The same risks apply to BSIF and TRIG, maybe more so in Trig’s case as the French methodology for supporting renewable energy is being questioned by the EU and may be thrown out.
I wonder whether BSIF’s policy of distributing all its income may cause confusion for some investors who might not realise the higher yield comes at the expense of a falling NAV – investors in any BSIF C-share must remember to factor this in.
For the time being however the sector is in vogue and I expect to see it expand further
James Carthew is director at Sapient Research
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