Business
Sunrun Closes Securitization and Raises Additional Subordinated Financing
Transactions result in highest advance rate relative to the underlying collateral asset value in the company’s history, exceeding 100% of contracted Gross
About this update from Sunrun Inc.
[{"type":"text","content":"Transactions result in highest advance rate relative to the underlying collateral asset value in the company’s history, exceeding 100% of contracted Gross Earning Assets and achieves new low weighted average cost of capital Financings set new records, with record low spreads against benchmark rates and 2.28% senior tranche yield, and improving cost of subordinated financing SAN FRANCISCO, Sept. 30, 2021 (GLOBE NEWSWIRE) -- 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 d...