Sunrun Closes Securitization and Raises Additional Subordinated Financing
30 Setembro 2021 - 5:30PM
Sunrun (Nasdaq: RUN), the nation’s leading home solar, battery
storage and energy services company, today announced it has closed
the securitization of leases and power purchase agreements on
September 29th (“Sunrun 2021-2”). Sunrun today also announced the
execution and closing of an additional subordinated financing,
which is secured indirectly by the Class B Notes issued to a
subsidiary of Sunrun in the securitization transaction and by a
portion of Sunrun’s additional retained interest in the underlying
collateral assets in the securitization transaction.
“I am pleased with Sunrun’s record-setting project finance
execution and continued improvements in our cost of capital, across
both the senior securitized notes and subordinated subsidiary-level
financing. With these transactions, we achieved records with the
lowest cost of capital and highest advance rates in the company’s
history, in this case over 100% of the contracted Gross Earning
Assets of the securitized pool measured using a 5% discount rate,”
said Ed Fenster, Sunrun Co-Founder and Co-Executive Chair. “These
financings highlight that Sunrun can not only fund growth but also
generate cash, despite incurring billions in capital expenditures
and operating costs.”
While the 2021-2 securitization transaction was structured with
both A- (“Class A”) and BB- (“Class B”) rated notes, only the Class
A notes were sold to investors in the securitization process. The
Class A notes have an initial balance of $447.1 million and were
priced at a yield of 2.28%, representing a spread to the benchmark
swap rate of 120 bps at the time of pricing. This represents an
improvement in the spread of 15 bps from the securitization issued
by Sunrun in March 2021, which previously represented the lowest
spread achieved by Sunrun or Vivint Solar, inception-to-date. The
Class A notes represent an advance rate of approximately 75% of the
securitization share of the aggregate discounted solar asset
balance (i.e., contracted cash flows available for debt service)
using a 5% discount rate. With a yield of 2.28%, the cost of debt
for the Class A notes is approximately 160 bps below the average
cost of the company’s overall securitized notes. The Class A notes
have an expected weighted average life of 6.3 years, an Anticipated
Repayment Date of January 30, 2029, and a final maturity date of
January 30, 2057.
Sunrun reports Gross Earning Assets (“GEA”) and Gross Earning
Assets Contracted Period (“CGEA”, also referred to as contracted
Gross Earning Assets) for the fleet of solar systems, which
represents the present value (using a 5% unlevered discount rate)
of expected cash flows from customers, less estimated operating and
maintenance costs and distributions to tax equity partners in
partnership flip structures. GEA includes estimated renewals while
CGEA only includes the cash flows expected during the initial
customer contract period. For the full definition of GEA and CGEA,
please see our latest earnings press release or investor
presentation, both of which can be accessed on our investor
relations website at https://investors.sunrun.com.
Sunrun raised an additional subordinated subsidiary-level
financing (secured, in part, by the distributions from the Class B
notes) after the securitization transaction closed, which increased
the cumulative advance rate obtained by Sunrun with respect to the
assets within the subsidiary funds. When taken together, Sunrun
will realize proceeds from the issuance of the Class A securitized
notes and subordinated financing, net of transaction fees, that
represent over 100% of the CGEA associated with the assets in the
securitization transaction. CGEA represented approximately 73% of
the total GEA associated with the underlying assets. The
subordinated financing will be funded in two draws, with the first
draw concurrent with closing in September and the second draw
occurring in October.
Deutsche Bank Securities was the sole structuring agent and
served as joint bookrunner of the securitization transaction along
with Credit Suisse and BofA Securities. Truist Securities, KeyBanc
Capital Markets, RBC Capital Markets and Citigroup served as
co-managers for the securitization.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of
these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such jurisdiction.
Forward Looking Statements
This communication contains forward-looking statements related
to Sunrun (the “Company”) within the meaning of Section 27A of the
Securities Act of 1933, and Section 21E of the Securities Exchange
Act of 1934 and the Private Securities Litigation Reform Act of
1995. Such forward-looking statements include, but are not limited
to, statements related to: the Company’s business plan, market
leadership, competitive advantages, operational and financial
results and metrics (and the assumptions related to the calculation
of such metrics); the Company’s momentum in the company’s business
strategies, expectations regarding market share, customer value
proposition, market penetration, financing activities, financing
capacity, product mix, and ability to manage cash flow and
liquidity; and the growth of the solar industry. These statements
are not guarantees of future performance; they reflect the
Company’s current views with respect to future events and are based
on assumptions and estimates and are subject to known and unknown
risks, uncertainties and other factors that may cause actual
results, performance or achievements to be materially different
from expectations or results projected or implied by
forward-looking statements. The risks and uncertainties that could
cause the Company’s results to differ materially from those
expressed or implied by such forward-looking statements include:
the impact of COVID-19 on the Company and its business and
operations; the successful integration of Vivint Solar; the
Company’s leadership team and ability to retract and retain key
employees; the availability of additional financing on acceptable
terms; changes in the retail prices of traditional utility
generated electricity; worldwide economic conditions, including
slow or negative growth rates in global and domestic economies and
weakened consumer confidence and spending; changes in policies and
regulations including net metering and interconnection limits or
caps; the availability of rebates, tax credits and other
incentives; the availability of solar panels, batteries, and other
components and raw materials; the Company’s ability to attract and
retain the Company’s relationships with third parties, including
the Company’s solar partners; the Company’s continued ability to
manage costs associated with solar service offerings; the Company’s
business plan and the Company’s ability to effectively manage the
Company’s growth and labor constraints; the Company’s ability to
meet the covenants in the Company’s investment funds and debt
facilities; factors impacting the solar industry generally, an and
such other risks and uncertainties identified in the reports that
we file with the U.S. Securities and Exchange Commission from time
to time. All forward-looking statements used herein are based on
information available to us as of the date hereof, and we assume no
obligation to update publicly these forward-looking statements for
any reason, except as required by law.
Investor & Analyst Contact:
Patrick JobinSenior Vice President, Finance &
IRinvestors@sunrun.com
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