Greenko Power II Limited / Restricted Group IV Additional Discussion Report: SSC Discussion 2026-09-17

• Report date: 2026-09-17
• Issuer / Theme: Greenko Power II Limited / Restricted Group IV — refinancing resilience, cash conversion, structural protection, and lifecycle free cash flow
• Report type: additional_discussion
• Discussion scope: SSC discussion covering the December 2028 refinancing path and early-warning indicators for credit deterioration
• Reference context: External SSC discussion dated 2026-09-17; existing Greenko Power II / Restricted Group IV issuer summary dated 2026-05-12 and issuer coverage materials

1. Purpose and Treatment

This additional discussion records an external SSC discussion about the credit risk path for Greenko Power II Limited / Restricted Group IV (RG IV). It is a supplementary analytical record, not a new verified issuer report or a recommendation on the notes. It preserves the questions, answer logic, follow-up tests, and warning lines raised in the discussion so that later issuer-summary work can distinguish a confirmed change from an analytical hypothesis.

The existing issuer summary establishes the core context: Greenko Power II is a Mauritius financing SPV for the RG IV renewable-asset perimeter; its USD 1.0bn 4.30% Senior Notes mature in December 2028 and benefit from a Greenko Energy Holdings (GEH) guarantee. The current report materials confirmed that legal principal, MCS performance, DSCR, DSRA, cash-trap status, hedge terms, and current market levels required further confirmation. Nothing in this additional discussion changes that separation between the RG IV repayment perimeter and GEH's wider group credit profile.

Statements described as SSC findings reflect the external discussion's cited research and should be independently checked against primary documents before they are used as established facts in a subsequent issuer report. Numerical warning lines are analytical guideposts, rather than covenant thresholds or rating-agency triggers.

2. Discussion Takeaway

The discussion's central read-through is that the credit should be monitored as a set of connected deterioration paths rather than through a single leverage or EBITDA metric. The near-term risk is not presented as an immediate inability to pay the fixed coupon. Instead, a gradual weakening in discretionary cash generation, MCS execution, asset ring-fencing, hedge economics, or GEH funding optionality could leave a larger and more expensive refinancing task at December 2028.

The SSC discussion reported a more constructive historical amortization result than was available in the existing issuer summary. It stated that the June 2025 scheduled payment reconciled with reported debt repayment, and that December 2025 and June 2026 amortization appeared to have been paid in full based on principal-factor evidence. On that discussion evidence, legal principal would have followed the contractual path to about US$717.5mn at June 2026, with a scheduled reduction to about US$675.0mn after the December 2026 payment. These later payment and factor observations are not independently verified by the existing issuer coverage materials and remain a priority primary-source check.

Even on the scheduled path, the discussion noted that approximately US$537.5mn would remain at maturity. The conclusion is therefore not that amortization has removed refinancing risk, but that a clean legal-principal path would make the residual manageable only if operating cash conversion, liquidity protection, hedge coverage, and GEH/market access remain adequate. The important change point would be a combination of signals: a persistent gap to the MCS schedule, weaker conversion of EBITDA into operating cash flow, use or erosion of debt-service reserves, more costly or shorter refinancing, and evidence of cash or asset leakage from RG IV.

3. Q&A Discussion Notes

3.1 Question 1 — whether deleveraging is real and when 2028 refinancing becomes active risk

Question intent. The first question asked how much apparent deleveraging genuinely reduces the December 2028 refinancing requirement when MCS can be carried forward without itself constituting a Default. It also asked for the earliest point at which a larger residual maturity should change the risk assessment.

Answer points and follow-up. The SSC response reconciled the offering memorandum amortization schedule with the September 2025 financial statements and reported June 2025 debt repayment. It concluded that mandatory and MCS amortization appeared to have been paid through June 2025. The follow-up reported principal-factor evidence indicating full December 2025 and June 2026 amortization and a June 2026 legal-principal baseline of about US$717.5mn. The next direct test identified in the discussion is whether the December 2026 payment reduces principal by about US$42.5mn to approximately US$675.0mn.

Issue deepened by follow-up. A missed MCS payment is structurally different from missed mandatory debt service: it can leave headline default status unchanged while increasing the terminal refinancing balance. The discussion therefore treated actual legal principal against the contractual factor path as more informative than accounting borrowings or an isolated debt-service-compliance statement. It proposed escalation if two consecutive MCS underpayments or approximately US$40-50mn of uncured cumulative MCS slippage emerges, particularly if projected maturity principal approaches US$600mn or more.

Credit implication. Amortization evidence, if verified, would reduce the concern that historic deleveraging was merely an accounting presentation. It would not make the instrument self-liquidating. A principal path above schedule becomes materially more concerning when weak collections, DSCR/DSRA pressure, or weaker GEH refinancing access simultaneously diminish the ability to refinance the increased residual.

3.2 Question 2 — whether generation and collections weakness becomes structural debt-service pressure

Question intent. The second question separated operating cash-generation risk from the maturity-balance issue. It asked when poor generation, tariffs, curtailment, or payment behavior should be regarded as a structural deterioration in cash available for debt service rather than ordinary project volatility.

Answer points and follow-up. The SSC discussion referred to the existing public context in which FY2025 was weaker but 1H FY2026 generation and revenue recovered. It characterized the September 2025 increase in receivables as a cash-conversion concern, while noting that the oldest receivable bucket had not yet materially worsened. The follow-up argued that OCF/EBITDA below roughly 60% should not be decisive in isolation. It should become a stronger warning if it persists for two reporting periods alongside a second weak production season or migration into older receivable-ageing buckets.

Issue deepened by follow-up. The discussion distinguished excess-cash protection from hard debt-service protection. MCS deferral would show that deleveraging capacity is weakening; DSCR approaching about 1.20-1.25x, DSCR below 1.15x, or a non-technical DSRA draw or delayed replenishment would indicate pressure on mandatory debt-service protection. It also identified a major offtaker's prolonged non-payment, dispute, or restructuring as a potentially earlier issuer-specific escalation event even before aggregate metrics cross a stated threshold.

Credit implication. Another weak season alone should not be treated as a permanent impairment. The risk becomes structural when weak output, ageing receivables, low OCF conversion, and reserve or covenant pressure reinforce one another and begin to constrain MCS. This would connect operating weakness directly to both the maturity balance and rating/spread risk.

3.3 Question 3 — hedge economics and refinancing-channel quality

Question intent. The third question considered whether higher rates, FX hedging costs, collateral demands, or a deterioration in financing tenor could weaken credit quality even if RG IV's operating performance is stable.

Answer points and follow-up. The SSC discussion treated the existing 4.30% notes as fixed-rate debt and described approximately US$537.5mn of USD/INR exposure as covered by a long-standing derivative position. It also referred to GEH's demonstrated offshore and domestic funding channels. The follow-up emphasized that these are supports to the base case, not proof that a 2028 refinancing will be available on the same terms.

Issue deepened by follow-up. The discussion laid out a sequence: MCS underperformance raises the maturity principal above the scheduled hedge notional; the incremental exposure may require new hedge capacity; higher hedge premium or collateral needs consume liquidity; permanent refinancing becomes costlier or shorter; and post-refinancing coverage weakens. It suggested that a projected residual above roughly US$575-600mn, no matching hedge increase, long-term refinancing cost around 8-9% or higher, and greater dependence on shorter-tenor bridges should prompt active spread/rating-risk monitoring. A harder reassessment would be warranted if permanent financing were only available at roughly 9-10% or more, at short tenor, or with material liquidity-consuming hedge collateral and no superior domestic alternative.

Credit implication. The relevant warning is loss of permanent-funding optionality, not any single market yield. A larger residual can still be manageable if genuinely long-dated domestic financing is available at sustainable cost and avoids incremental FX exposure. The risk becomes credit-negative when offshore and domestic alternatives weaken together and bridge borrowing becomes the principal solution.

3.4 Question 4 — ring-fencing and creditor leakage before ratios weaken

Question intent. The fourth question asked whether changes in GEH's capital allocation, related-party activity, secured borrowing, distributions, or asset ownership could weaken RG IV's creditor protection before operating performance or refinancing access visibly deteriorates.

Answer points and follow-up. The SSC discussion reported that, through September 2025, the restricted perimeter was stable, intercompany net borrowings from the Unrestricted Group had declined, no large upstream distribution was identified, and no material asset extraction was evident. It nevertheless noted that the indenture permits flexibility through restricted-payment, indebtedness, lien, asset-sale, and affiliate-transaction provisions.

Issue deepened by follow-up. The follow-up shifted the test from formal covenant breach to the economic direction of cash, assets, and creditor priority. It proposed that a persistent US$25-50mn or more of net lending to the Unrestricted Group, US$50mn or more of cumulative upstream distributions or affiliate advances combined with another leakage indicator, material new secured claims without offsetting deleveraging, or transfer of assets representing about 10-15% or more of cash generation should prompt closer structural assessment. It further stated that one material extraction event or two moderate leakage indicators could justify revising the base assumption even if DSCR remains above 1.15x.

Credit implication. Current group integration is not necessarily adverse while funds and assets remain in, or neutral to, RG IV. The credit view would weaken earlier than a ratio breach if RG IV becomes a material source of liquidity, stronger assets, or structurally subordinated funding for the wider group.

3.5 Question 5 — lifecycle maintenance and restoration as a free-cash-flow risk

Question intent. The fifth question tested whether maintenance, restoration, repowering, and other lifecycle expenditure could reduce free cash available for debt service and deleveraging while EBITDA remains superficially stable.

Answer points and follow-up. The SSC discussion characterized current disclosed capex as modest, referring to FY2025 capex of US$14.9mn, 1H FY2026 capex of US$2.3mn, and negligible capital commitments at September 2025. It also referred to a recovered hydro contribution after Sikkim restoration. The discussion did not present lifecycle capex as an observed primary weakness, but as a prospective risk because economic maintenance can be split between operating expense and capital expenditure.

Issue deepened by follow-up. The proposed monitoring set covers capitalized replacement spending, major expensed maintenance, asset availability, forced outages, uninsured restoration costs, insurance-recovery timing, repair-related borrowing, and the effect of maintenance cash outflows on MCS. The discussion's practical warning line was recurring US$30-40mn or more annual economic maintenance/restoration spending for about two years, especially if it merely preserves existing output and coincides with declining availability, MCS deferral, new secured borrowing, or DSRA use.

Credit implication. The concern is a deterioration in normalized free cash flow, not a temporary accounting capex increase. Essential expenditure funded through additional secured debt or reserve use, while MCS is deferred, would join operating and structural risks in increasing the 2028 refinancing burden.

4. Candidate Items For issuer_notes.md

The following are candidate items for a later approved update to issuer_notes.md. They are not updates to issuer memory made by this report.

5. Monitoring / Next Check

The next high-value confirmation is the actual December 2026 amortization factor and legal principal. It should be compared directly with the discussion's June 2026 baseline and scheduled post-payment balance, rather than inferred from total accounting borrowings. A deviation should then be considered together with the next RG IV cash-flow and receivable-ageing disclosures, not in isolation.

For the operating case, the next check should determine whether the September 2025 receivable build reversed, aged further, or was absorbed by collections. The relevant protection evidence is contractual DSCR and DSRA status, including any draw, delayed replenishment, cash trap, restricted-payment limitation, or waiver. Reported EBITDA and finance-cost coverage are not substitutes for those items.

For the refinancing case, later analysis should obtain the current hedge notional, maturity, premium, collateral, and counterparty exposure; test whether it covers the actual projected principal; and distinguish executable permanent financing from temporary bridge arrangements. GEH's other refinancing transactions should be used as market-access context, but should not be treated as evidence that RG IV's dedicated 2028 refinancing is arranged.

For the structural and asset cases, focus on directionality: whether RG IV remains a net recipient of group funding, whether cash or assets are being transferred out, whether secured-priority claims are added, and whether maintenance/restoration costs are growing faster than the cash generation they preserve. These checks are intended to identify linked deterioration before a formal covenant breach.

6. Unverified / Pending Items

The existing issuer coverage materials do not independently confirm the SSC discussion's reported December 2025 and June 2026 principal-factor evidence, the June 2026 legal principal, or the December 2026 scheduled payment outcome. These require primary transaction, paying-agent, trustee, compliance-certificate, or later issuer financial-statement support.

Current DSCR, DSRA balances and requirements, cash-trap status, restricted-payment compliance, MCS Officer's Certificates, hedge notional and collateral terms, waiver history, and current market price or refinancing quotations remain unconfirmed. The discussion's US$40-50mn MCS, US$575-600mn residual, 8-10% refinancing-cost, 10-15% cash-generation-transfer, and US$30-40mn maintenance indicators are analytical warning lines, not known contractual limits.

Post-September 2025 related-party balances, distributions, new liens, asset transfers, maintenance budgets, asset availability, restoration costs, and insurance recoveries also need later primary disclosure. In particular, Sikkim-related observations should not be treated as RG IV asset-level facts without confirmation that the relevant assets, costs, or recoveries fall inside the restricted perimeter.

7. Reference Context

This report draws its established issuer context from the existing Greenko Power II / Restricted Group IV issuer summary dated 2026-05-12, issuer_notes.md, knowledge_snapshot.md, and source_registry.md. Those materials identify the 2021 Offering Memorandum and SGX FY2025 and 1H FY2026 financial disclosures as the core primary-source routes.

The discussion-specific material is the external SSC discussion dated 2026-09-17. It introduced later-period observations and analytical thresholds that are recorded here as discussion content pending independent confirmation. No permanent issuer-memory file, source registry, existing issuer summary, or issuer flash was changed by this additional discussion.