Sunnova Energy is preparing to raise $453 million in securitized bonds to fund its business extending loans to homeowners that finance solar panel systems and solar energy storage batteries.
The company will sell the securities to investors through two trusts, the Sunnova Sol VI Issuer, 2024-1 and the Sunnova Helios XIII, 2024-A, raising $226 million and $227 million, respectively.
Sunnova Sol VI will issue three tranches of class A, B and C notes, raising $194.5 million, $16.5 million and $15 million, respectively, according to a statement from the company. All of the notes, which repay investors quarterly, have the same rated final maturity date of Jan. 30, 2059, Sunnova said. The A, B, and C notes pay interest rates of 5.65%, 7.00% and 9.00%, respectively, the company said.
Kroll Bond Rating Agency assigns ratings of A-, BBB and BB- to the notes, it said, adding that the notes benefit from overcollateralization, a liquidity reserve account, a supplemental reserve account, excess spread and subordination for all three notes. The 21,561 leases were extended to customers with prime quality credit profiles, KBRA said. Notably, homeowner customers had a weighted average FICO score of 744, and those with a FICO score greater than or equal to 700 represented about 73.7% of the pool's aggregate discount solar asset balance (ADSAB), ratings analysts said.
Atlas SP, is listed as sole structuring agent and sole bookrunner, with ING on the transaction and co-manager and initial purchaser, and SMBC Nikko on the deal as initial purchaser, the company said.
Sunnova Helios XII, meanwhile, will raise $227 million, through three tranches of A, B and C notes, which have a legal final maturity of February 2051, according to Fitch Ratings.
Atlas SP is sole structuring agent and shares joint bookrunning duties with RBC Capital Markets. RBC and ING are also initial purchasers. ING and SMBC Nikko, meanwhile, are co-managers and initial note purchasers.
Notably, the deal will include a small amount, 2.2% of home improvement loans, typically roof replacement and repair, Fitch said.
The A, B and C notes have credit enhancement levels of 39.1%, 26.3% and 16.2%, respectively, Fitch said. Similar to Sunnova Sol, Helios XIII is supported by loans extended to prime borrowers. In this deal, obligors have strong FICO scores averaging 735, the rating agency said. Another credit highlight is the strong recovery incentives associated with solar energy systems, Fitch said. Not only do PV systems typically save on energy costs, but Sunnova has the right to disconnect the system on charged-off accounts.
Fitch says it assigns AA-, A- and BBB to the A, B, and C notes.
