SolarCity has priced $201 million of notes backed by solar assets, its third and largest securitization to date.
The $160 million senior class, rated BBB+’ by Standard & Poor’s, was sold at a fixed interest rate of 4.026%, according to a company statement. The notes have a weighted average life of 6.89 years and were priced at a spread of 180 basis points over interpolated swaps, according to aperson familiar with the deal.
The $41.5 million junior class, rated BB,’ wase sold at a fixed interest rate of 5.45%. The notes are due July 20, 2022 and have a weighted average life of 6.89-years.
Credit Suisse is the lead manager on the deal.
The issuer’s first two securitizations, completed in
Despite its larger size, pricing on the most recent deal was more favorable to SolarCity. It had to pay investors a fixed interest rate of 4.80% on its inaugural deal and 4.6% on its second deal.
All three deals are backed by the cash flow generated by a pool of photovoltaic systems and related leases and power purchase agreements.
The 2014-2 deal includes almost 16,000 rooftop PV systems in the pool, about three times the previous offerings with an aggregate size of 118 megawatts (DC), according to S&P. By comaprison SolarCity’s 2014-1 transaction includes 6,596 PV systems and its inaugural 2013-1 deal included 5,033 PV systems.
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 in its presale report on the latest deal.
The ratings agency said that the issuer has been given permission to operate approximately 70,200 financed systems.
