On the morning of July 18th, shares of SunEdison’s new yieldco subsidiary began trading on the NASDAQ under the symbol TERP. TerraForm Power held an initial public offering of 20 million shares at US$25 per share, representing $500 million in gross proceeds.
This is the third yieldco to hold solar assets to go public in slightly more than one month, following IPOs for Abengoa Yield and NextEra Energy Partners. TerraForm Power represents the largest solar portfolio of the three at 808 MW.
SunEdison has been very clear about the beneficial economics of holding projects upon completion as opposed to selling them. The company says that it has dedicated its more profitable assets to TerraForm Power, including 135 MW of distributed projects in the United States and Canada.
The yieldco also contains some very large projects, including the 266 MW Mount Signal project in Southern California and the 101 MW Amanecer CAP project in Chile. The majority of capacity in TerraForm Power’s portfolio is in the United States, at 557 MW, however it also includes projects in the UK and Canada as well the Amanecer project.
In addition to this 808 MW of initial projects, SunEdison plans to transfer sufficient projects to the yieldco to generate $175 million annually in the first year of completion of these projects. TerraForm power will have its pick among 1.1 GW of these projects, all of which are scheduled for completion by the end of 2016 or sooner.
TerraForm Power will pay an initial quarterly dividend of $0.23 per share of class A common stock. Early trading showed strong interest, with the stock price jumping to around $33.40 in the first two hours.