SolarCity plans to issue $201 million of securities backed by solar assets for its third securitization.
The upcoming transaction, SolarCity 2014-2, will offer two tranches of notes that have been assigned preliminary ratings by Standard & Poor’s. S&P expects to rated the $160 million of class A notes, BBB+’ and $41.5 million of class B notes, BB’.
Credit Suisse is the lead manager on the deal.
The collateral backing the deal consists of a portfolio of solar assets that will produce an income stream. These include customer agreements, solar equipment, permits, manufacturer’s warranties, and cash flow associated with the ownership of these assets.
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.