Sunrun has initiated a two-tranched financing round in A and BB notes, backed by its portfolio of solar installations across the US.
Sunrun (NASDAQ:RUN), solar and battery energy company announced that it has entered a financing round with A notes that yield 3.63 percent and BB notes with an undisclosed yield. The two notes will be secured by over 28,000 in solar panel rooftop installations, with the transaction anticipated to close on October 28.
As quoted in the press release:
“We are pleased that the market increasingly recognizes both the high quality of residential solar assets as well as our industry-leading performance,” said Ed Fenster, Sunrun co-Founder and Executive Chairman. “These record capital costs and advance rates will enable more American households to choose affordable solar energy and battery service.”
The two-tranche securitization includes A rated notes at an 80.0% advance rate and subordinated BB rated notes at a cumulative 95.0% advance rate. The $312.4 million in A rated notes priced at a yield of 3.63%, representing a spread to the benchmark swap rate of 205 bps. The A rated notes carry a weighted average life of 7.3 years through the Anticipated Repayment Date of November 1, 2027, and have a final maturity of February 1, 2055. Consistent with its 2018 securitization, Sunrun plans to retain the subordinated notes. Sunrun anticipates arranging additional subordinated debt outside of the ABS market, which is typically most efficient for large, investment-grade issuances. Advance rates are calculated relative to the securitization share of the aggregate discounted solar asset balance (i.e., cash flows available for debt service).