Sunrun, a publicly traded solar and energy storage installer, announced it closed a $431 million securitization of leases and power purchase agreements.
The solar installer uses solar asset-backed securitizations (ABS) to raise capital and fund its business operations. The company obtains capital from private funds by selling tax equity and uses bundled residential solar systems as collateral for loans.
The deal included $331 million of Class A-1 notes that were marketed in a public-asset backed securitization and rated A-. The Class A-1 Notes were oversubscribed and priced at a spread of 240 bps and a 6.34% yield and a coupon of 6.15%. The deal also included $100 million of Class A-2 notes were privately placed and rated BB-.
The transaction was tied to a diversified portfolio of 63,318 systems distributed across 12 states and Washington D.C and 40 utility service territories. The weighted average customer FICO score is 757 and the transaction is expected to close by July 30, 2025, said Sunrun.
The Class A Notes have an expected weighted average life of 5.08 years, optional redemption date of Jan. 30, 2034, and a final maturity date of Jan. 30, 2054.
Bank of America was the sole structuring agent and served as joint bookrunner along with Citigroup, Keybanc and Truist.
“Sunrun’s third securitization transaction of 2025 represents a refinancing of a seasoned pool of residential solar assets,” said Danny Abajian, chief financial officer, Sunrun. “The strong performance of our numerous securitizations backed by these assets continues to be notable. The credit ratings for all Sunrun securitizations have been affirmed or upgraded since their issuance, as the performance of these transactions have remained in line with expectations.”
The oversubscription of the Class A-1 notes indicates “robust market demand” for Sunrun’s financing products, said a report from Nasdaq.
In January 2025 the company priced a $629 million senior securitization of residential solar and storage leases and loans. The portfolio consisted of 39,458 systems distributed across 20 states, Washington D.C. and Puerto Rico and 83 utility service territories. The weighted average customer FICO score is 738. The transaction, which it said at the time was the second-largest securitization of residential solar leases and loans, closed in February 2025. It was oversubscribed by investors.
The moves suggest investor confidence in residential solar portfolio performance. While the industry is facing difficult times and several headwinds, there are opportunities for the industry to cut costs and deliver value to customers.
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