Vivint Solar refinances tax equity funds with $313 million loan facility

In the wake of SunEdison’s failed attempt to acquire Vivint Solar, which at the time was the 2nd-largest residential solar installer in the United States, there were concerns that the company would have a hard time raising capital.

Today those concerns were further dispelled, as Vivint announced closing on a $313 million term loan facility. The installer plans to use to refinance 11 tax equity funds that were part of its aggregation facility, and says that this provides back-leverage financing for a portfolio of 12 tax equity funds which owned over 307 MW of PV systems across 12 states.

Vivint notes that the new financing has a 5-year term, which it says will exceed the projected flip dates for many of these funds. The company has also alluded to attractive rates.

“We are pleased to announce this next step in our financing strategy, which allows us to repay outstanding loans under our aggregation facility, increase advance rates, free up new borrowing capacity, raise incremental debt against SREC contracts and lock in attractive all-in borrowing rates,” said Vivint Solar Executive VP and Head of Capital Markets Thomas Plagemann.

Investec served as the lead bank in the financing. The bank notes that the transaction was 1.5 times over-subscribed, which it says should “give future borrowers confidence.”

Vivint Solar has described the loan facility as an alternative to securitization, which was pioneered by SolarCity as a means to secure low-cost financing to build solar projects. “Over time, we expect residential installers will find the bank market to be an attractive alternative to the securitization market,” noted Investec Co-Head of Power and Infrastructure Michael Pantelogianis.