Talesun Solar Bond: where securitization meets project financing

In July 2016, TS Energy Italy SpA, the subsidiary of a Chinese multinational group active in the renewable energy sector, structured a transaction called "Project Caesar" involving the issuance of a €40 million project bond. The Bond served to refinance part of the Issuer's Italian assets, consisting in a portfolio of 39 photovoltaic plants owned by several SPVs controlled by TS Energy Italy SpA. The case is useful to analyze the characteristics of a project finance asset backed security from the perspective of a fixed income investor. With the analysis of the issuer re-organization preliminary to the bond issuance, along with the data on the project’s portfolio and the fixed rate senior secured notes, the reader can perform the tasks of a bond investor who needs to assess the strengths and weaknesses of the deal. The case is also informative with respect to the progressive convergence of traditional project finance schemes with the securitization market.