sPower uses renewable portfolio to close $421 million bond deal

The more the solar industry matures, the more common it is to see developers and independent power producers (IPPs) leverage their renewable energy assets to secure financing.

Now you can add sPower to that rapidly growing list.

Yesterday, the Utah-based IPP closed a $421 million bond issue using its 565 MW of utility-scale solar and wind assets, which represent 44% of its operating portfolio, as its securities. It is the first time sPower has used the bond market as a financing vehicle.

All new project development will be funded by incremental proceeds from this refinancing of previous bank loans, which totaled $300 million medium-term loans. sPower says the long-term nature of this new financing source and the elimination of refinancing risk will lock in predictable cash flows for more than 20 years.

“This was our inaugural institutional bond market transaction, and was very complex given the nine underlying tax equity partnerships,” said David Shipley, sPower CFO. “We are very pleased with the outcome and our ability to access long-term, fixed-rate debt at attractive levels.”

Citi served as Ratings Advisor, Structuring Agent and Lead Placement Agent. Credit Agricole, KeyBanc, Rabo, Societe Generale and Wells Fargo served as Co-Placement Agents. CohnReznick served as financial advisor.

In August, sPower was purchased by a joint-venture co-controlled by Virginia-based AES Corp. and the Alberta (Canada) Investment Management Corp. (AIMC0) for $1.6 billion.