INVESTMENT CASE STUDY
High Yield Debt: A Senior Secured NCD Placement in Western Concession Private Limited
A senior secured, high-yield NCD placement funding operational expenses for an Indian LNG terminal, backed by an asset charge, a full share pledge, and a personal guarantee.
At-a-Glance
The Opportunity
This senior secured high-yield NCD placement put our investors' capital where conventional financing structurally can't reach, a regulated, multi-decade infrastructure asset caught in the gap between construction and steady-state operation. Rather than taking on standard corporate credit risk, investors were compensated with a yield premium specifically for solving that gap: capital sized directly against Western Concession's operational funding need, senior and secured in standing, without disturbing the terms of existing senior project loans or diluting the underlying equity. It's a structure built for a pre-steady-state asset, one that rigid bank covenants, designed around stabilized cash flows, simply aren't equipped to accommodate.
The gap itself is a function of how infrastructure of this kind gets built. By mid-2026, India's domestic energy mix had shifted meaningfully toward gas-based industrial power, driving high capacity utilization at LNG regasification facilities. Mid-stream infrastructure assets of this kind face a structural financing gap by design: they require substantial upfront development expenditure well before long-term tolling or off-take revenues begin flowing, even as the underlying terminal operates under high barrier-to-entry regulation with a multi-decade economic life once operational. That mismatch, capital needed early, security and stability arriving only later, is precisely what this placement was structured to bridge on our investors' behalf.
Rationale
The default approach to a mid-stream infrastructure liquidity gap is either commercial bank lending, which typically comes bound by strict macro-financial ratio covenants poorly matched to a pre-steady-state asset, or a dilutive equity raise. This placement took a different structure: senior secured high-yield debt collateralized by a first-lien charge over the project's physical assets, a full share pledge on the parent holding company, and a personal guarantee from a key promoter — allowing the issuer to fund operational expenses while leaving existing senior loan covenants and the equity cap table undisturbed.
₹1,500 Cr
Total transaction size across both tranches
₹7,533.81
Floor price per share for the institutional tranche
₹300 Cr
Promoter warrant commitment, convertible within 18 months
27.22%
Standalone capital adequacy ratio (CRAR) ahead of the raise
Mechanics
The facility was engineered as a self-liquidating project finance structure, with cash flow routed through a strict priority waterfall and a multi-layered collateral package securing lender capital.
Exclusive Project Asset Charge
A first-lien legal charge over the terminal infrastructure secures maximum recovery value in a default or restructuring scenario.
100% Share Pledge
The Hold-Co's entire equity stack sits in escrow; a covenant breach transfers voting and ownership control to lenders directly.
DSRA Cash Routing
Gas throughput tariffs and storage fees route into an independent Debt Service Reserve Account managed by a third-party debenture trustee.
Risk Factors: Managing the Downside
Track Record
Since funding closed, the facility has performed exactly as structured. Proceeds were applied in full to the operational expenses they were earmarked for, and the complete collateral package, first-lien charge, full share pledge, personal guarantee, was placed and activated at close. That immediacy is the structural advantage worth noting: for a mid-stream asset still ramping toward steady-state revenue, protection that's fully in force from inception means downside coverage doesn't wait on the terminal's cash flows to mature. At two and a half months, the facility is still early in its tenor, so a multi-quarter servicing record has yet to build, a natural function of timeline rather than any sign of concern, and one this assessment will continue to track as it develops.
This case study is shared for informational and illustrative purposes only. It describes a specific past transaction or structure and does not constitute investment advice, a recommendation, an offer, or a solicitation to invest in any security, scheme, or product. Cambridge Wealth (Baker Street Fintech Pvt. Ltd.) is a SEBI-registered Mutual Fund Distributor (ARN 172841) and does not provide investment advisory services; nothing in this document should be construed as personalized advice or a substitute for independent professional advice suited to your specific financial situation. This placement, where referenced, was made via Axis Structured Credit AIF - III. Details of the underlying structure, terms, risks, and eligibility criteria are governed solely by that vehicle's private placement memorandum, offer document, or scheme information document, which should be read in full before making any investment decision. Figures, dates, and outcomes described are historical and specific to this transaction. Past performance, whether of this transaction, this asset class, or any comparable strategy, is not indicative of, and does not guarantee, future results. Any market or industry data cited is drawn from third-party or publicly available sources believed to be reliable but not independently verified by Cambridge Wealth, and is subject to change. No representation is made that any investor will or is likely to achieve outcomes similar to those described. Investments of the type described carry risk, including but not limited to market, credit, liquidity, currency, and regulatory risk, and may result in partial or total loss of capital. This document does not account for the objectives, financial situation, or needs of any specific investor. Prospective investors should independently assess suitability and consult their own legal, tax, and financial advisors before proceeding.