Riverstone Credit continues shift to green and sustainability-linked loans – Over the course of 2021, Riverstone Credit Opportunities saw a modest fall in its NAV from $1.04 to $1.02, but a narrowing of its discount as the share price moved from $0.683 to $0.87. The dividend was maintained at 7 cents per share but this was not covered by earnings – which were 4.89 cents – and this drove the NAV fall. There has been some cash drag as loans have been repaid early – over 2021, the portfolio was 72% invested on average.
The fund made six investments over 2021, moving its focus from upstream exposure, to target energy infrastructure & infrastructure services and energy transition investments. In the second half of 2021, there were two new investments, Circulus Holdings and Streamline Innovations.
Circulus is a sponsor-backed green loan to a recycler of low-density polyethylene for use in food-grade packaging, injection-moulding applications, bags, films and other high-end products. Being classified as a green loan per LSTA (Loan Syndications and Trading Association) guidelines, requires the use of proceeds be tied to specific green initiatives and carefully tracked to ensure compliance.
Streamline Innovations is a sponsor-backed sustainability-linked loan to a leader in environmentally advanced treatment solutions and equipment for hydrogen sulphide in energy, renewable fuels, wastewater, landfill gas, biogas, and industrial processes. Streamline was the company’s second sustainability-linked loan, whereby the loan pricing steps up if key sustainability targets are not achieved.
There was also one full realisation of the fund’s community solar investment (Aspen Power Partners) in October with a 36.0% gross IRR and 1.27x gross MOIC.
The fund also recognised an impairment on one investment.
The pipeline of potential new deals is focused on green loans and sustainability-linked loans as has been the case for all of its recent investments.
As at 31 December 2021, the fund had committed over 78.9% of capital to investments and had $65.9m net invested, equating to 70.0% of net capital available, and a cash balance of over $27m. Capital that has been committed but not yet invested continues to generate income as the company charges fees on committed but undrawn capital.
RCOI : Riverstone Credit continues shift to green and sustainability-linked loans