SolarCity priced $70.2 million of solar asset backed notes issued via its SolarCity LMC Series II Series 2014-1.
The notes, which Standard & Poor’s expects to rate BBB+’, priced with an interest coupon rate of 4.59% and an anticipated repayment date of April 2022.
By comparison, the issuer’s first deal, which was also the first-ever securitization of solar panel leases, Solar Asset Backed Notes, Series 2013-1, priced with an interest rate coupon of 4.80%. The notes were also rated BBB+’ by S&P.
Both deals are backed by the cash flow generated by a pool of photovoltaic systems and related leases and power purchase agreements. SolarCity sells renewable energy to customers that generally either sign a lease or a power purchase agreement (PPA) with the firm. “Lease customers pay a fixed monthly fee with an electricity production guarantee, and PPA customers pay a rate based on how much the electricity the solar energy system actually produces,” S&P said.
The new transaction includes 6,596 PV systems compared to the 5.033 PV systems included in the 2013-1 pool. The 2014 pool also includes contracts with longer customer agreements that range between 14 years to 20 years; 2013-1 included 10 to 20 year contracts.
S&P outlines key differences in the pool characteristics between both deals in the chart below.
Credit Suisse acted as sole structuring agent and sole bookrunner for both of the SolarCity deals. The sale of the 2014-1 notes is expected to close on April 10, 2014.