Tesla/SolarCity plans $340 million securitization of distributed solar assets


Even while Tesla has backed off of the aggressive growth pattern that SolarCity was on, the company is still showing its dynamism in financial deals, and continuing to provide a vision for the future.

On the same day that Tesla announced that it has provided electricity to a hospital in Puerto Rico, the Kroll Bond Rating Agency issued a report on what may be the largest solar securitization yet from the company that pioneered the practice in 2013.

According to the report, Tesla/SolarCity is preparing to issue $340 million through two tranches of bonds, backed by leases and power purchase agreements on distributed solar assets.

The bonds formally mature in 30 years, but Tesla expects to repay them by April 2028. Kroll provided an A- rating for the first class of $265 million in notes, but has not yet rated $75 million worth of bonds in the second class. No interest rate has yet been assigned.

These notes will be backed by $483 million in forthcoming payments on leases and power purchase agreements, with leases making up 57% of that balance. Kroll estimates that the bonds are around 16% over-collateralized.

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