SunPower Corporation (NASDAQ:SPWR) and Hannon Armstrong Sustainable Infrastructure Capital, Inc. (NYSE: HASI) today announced that their joint venture, SunStrong Capital Holdings, LLC (SunStrong), successfully closed its $400 million Solar Asset Backed Notes, Series 2018-1. The Notes were priced at a fixed interest rate of 5.68 percent per annum and received a rating of A (sf) from KBRA and a Green Bond Assessment of GB1, the highest rating, by Moody’s Investor Services. The anticipated repayment date is in November 2028, with a rated final maturity date in November 2048.
“As one of the largest renewable industry securitizations, this transaction is a testament to the high-quality asset portfolio of SunStrong,” said Manavendra Sial, SunPower Executive Vice President and Chief Financial Officer. “With the formation of this joint venture with Hannon Armstrong, we have now fully deconsolidated our existing leveraged residential lease portfolio, successfully continuing SunPower’s work to simplify our business. Specifically, 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. With a partner who is a leading capital and services provider to the sustainable infrastructure market, SunStrong is well positioned for future success.”
“Hannon Armstrong is pleased to facilitate SunPower achieving its financial goals while further executing on our strategy of expanding the programmatic financing arrangements with industry leaders in energy efficiency and renewable energy,” said Brendan Herron, Hannon Armstrong Executive Vice President and Chief Financial Officer.
The Notes were issued by a special purpose entity, SunStrong 2018-1 Issuer, LLC (SunStrong Issuer), an indirectly wholly-owned subsidiary of SunStrong. The Notes are secured by, and payable from, the cash flow generated by the managing member interests owned by SunStrong Issuer in certain indirectly owned subsidiary project companies, which own more than 37,500 residential solar leases originated by SunPower. The proceeds will primarily be used to refinance the existing debt obligations associated with SunStrong’s residential lease portfolio. SunStrong Issuer will be the sole obligor of the Notes and the Notes will not be obligations of SunStrong or any of its other subsidiaries, or of SunPower, Hannon Armstrong, or any of their respective subsidiaries. SunPower will continue to service the leases underlying the Notes.
The Notes will not be registered under the Securities Act of 1933, as amended (Securities Act), or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from, or a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Notes were offered and are only being sold to qualified institutional buyers under Rule 144A under the Securities Act and to persons outside the United States pursuant to Regulation S under the Securities Act. This announcement is neither an offer to sell nor a solicitation of an offer to buy any securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.