SunPower completes $400 million securitization

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On Wednesday, a subsidiary of SunPower and capital and services provider Hannon Armstrong issued one of the largest securitizations to date in the solar industry: $400 million in notes backed by a portfolio of 37,500 leases on rooftop PV systems, totaling 317 MW.

The notes have already made press from their strong rating, with Kroll Bond Rating Agency giving them an “A” rating (more details on this rating and an in-depth look at the portfolio can be read in this article by pv magazine USA correspondent John Weaver).

A SunPower filing with financial regulators on the close of the issue on these bonds provided a few more details: That the bonds will pay 5.68% annually, with an anticipated repayment date in November 2028 and a maturity date in November 2048.

This could bring in much-needed capital for SunPower, which has undergone a dramatic restructuring as it struggles to reach profitability – while at the same time retooling for its new IBC cell product and buying and retooling SolarWorld Americas’ factory in Oregon.

“This deconsolidation materially delevers our balance sheet, further improves our net debt position due to the accelerated placement of lease assets in the portfolio and reduces our interest expense while enabling us to maintain strong customer relationships through our asset management responsibilities,” noted SunPower Chief Financial Officer Manavendra Sial in a press statement.

However, a fair portion of the $400 million is already spoken for. On August 10 SunPower/Hannon Armstrong subsidiary SunStrong took out a $110 million mezzanine loan, and then in November another $80 million mezzanine loan at the unenviable rate of 12%. And while some of the second loan paid off part of the first, the proceeds from this securitization will pay off this second loan before they go to SunPower or Hannon Armstrong.