Adani Abbot Point Terminal Pty Ltd (AAPT) is offering to buy back up to A$75 million of $500 million of November 2018 bonds that it has on issue in the domestic corporate bond market. It is unusual for an issuer to buy back bonds that still have more than two years to go before reaching maturity but the offer may be welcomed by some investors.And for investors who choose not to participate in the buyback, the offer will put a floor under the price of the bonds, helping them pare back some of the recent and severe mark to market losses incurred on them.Before the buyback was launched Yieldbroker had the bonds marked at around 94 cents (clean) in the dollar or at a spread of approximately 666 basis points over bank bills. After the buyback was announced the price of the bonds moved up to around 95 cents in the dollar, or 638 bps over.AAPT is inviting investors to tender their bonds at a spread no tighter than 630 bps.The issue has never been a particularly popular one. AAPT debuted in the domestic debt capital market in October 2013. As a part of the Indian conglomerate, The Adani Group of Companies, the issuer was relatively unknown here.AAPT is the funding vehicle for the Adani Abbot Point Coal Terminal, which was privatised by the Queensland government in early 2011. With newly minted Baa3 and BBB- credit ratings from Moody's Investors Service and Standard & Poor's, AAPT came to the market with an ambitious $750 million five-year bond issue to refinance a portion of the acquisition debt.Its timing was fortunate in that it followed a few other BBB-rated issues that had identified investor appetite for lower rated but higher yielding bonds. Only $500 million of the bonds were sold, at a spread of 225 bps over bank bills. And as green bonds have grown in popularity, the bonds issued by AAPT bonds have diminished. The Adani Abbot Point Coal Terminal is located at the northern end of the Bowen Basin where a diverse range of coking and thermal coal producers are located. It has been regularly associated with pollution affecting the Great Barrier Reef, which is adjacent to the port.As a result, it has consistently shown-up in ADCM Services relative value analysis with credit spreads a full 100 bps or more wider than the quantifiable characteristics of the bonds can justify. This apparent disparity dramatically increased in March, when Moody's downgraded AAPT to Ba2.Moody's attributed the downgrade to "the increasing likelihood of material volatility in AAPT's cash flows due to the weakened position of AAPT's coal mining counterparties, the sole source of such cash flows, adding that "the ongoing severe pressure facing the coal sector translates into an increased likelihood of AAPT's counterparty contracts either not being renewed or subject to early termination."While Standard & Poor's BBB- rating remains intact, the excess spread on the bonds moved out to more than 600 bps after Moody's downgrade. The most recent relative value analysis