8point3 Energy to raise $420 million in IPO, details $525 million loan

8point3 Energy Partners LP, which was established by solar industry rivals, First Solar Inc and SunPower Corporation on March 10, is set to sell 20 million Class A shares at between $19 and $21 each, in an initial public offering (IPO). They are expected to be listed on the NASDAQ Global Market under the symbol “CAFD.”
There will also be the option to purchase an additional three million shares. If this option is exercised, reported Law360, it will bring in about $56.3 million in additional net proceeds.
According to Reuters, the IPO is expected to raise around $420 million. Overall, it adds, the yieldco could be valued at as much as $1.49 billion. Goldman, Sachs & Co. and Citigroup Global Markets Inc. are acting as lead book running managers for the IPO, while Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and Credit Agricole Securities (USA) Inc. are acting as joint book-running managers.
The proceeds of the IPO, say First Solar and SunPower, will be used to purchase the common units of 8point3 Operating Company, LLC, holds 8point3 Energy Partners’ project assets. 8point3 Operating Company is then expected to divide the cash between the two Delaware-based solar companies, and to fund future acquisitions.
According to NASDAQ, the yieldco has a current revenue of $2.13 million, and a negative net income of $9.17 million. Its total its assets are valued at $325.5 million, while liabilities are around $198 million.
The nitty gritty
In an SEC filing on June 9 to the U.S. Securities and Exchange Commission, thin film PV producer, First Solar and high efficiency c-Si manufacturer, SunPower, outlined their plans for the yieldco.
It says that SunPower will form and own 100% of 8point3 Operating Company (OpCo). “OpCo will acquire, in a series of transactions, the interest in each of the entities named under the caption ‘SunPower Project Entities’.” These are SSCA XIII Holding Company LLC, SSCA XXXI Holding Company LLC and Sunpower Commercial Holding Company I LLC. They represent 173 MW.
First Solar will, meanwhile, will contribute a 49% indirect economic interest in each of its solar energy projects held by Lost Hills Solar, LLC, (32 MW); North Star Solar, LLC (60 MW); and SG2 Imperial Valley, LLC (150 MW) to the OpCo. In addition, it will contribute a 100% interest in Maryland Solar LLC, a 20 MW PV project.
Overall, the yieldco will have solar PV projects worth 435 MW under its umbrella. In March, 8point3 Energy Partners said it would have a right of first offer (ROFO) on interests in projects totaling 1.13 GW from First Solar and SunPower.
Credit
The SEC filing also details a $525 million senior secured credit facility, which will be entered into by OpCo, comprising a $300 million term loan facility; a $200 million revolving credit facility; and a and a $25 million delayed draw term loan facility.
Funds will come from Credit Agricole Corporate and Investment Bank, Deutsche Bank AG New York Branch, JPMorgan Chase Bank, N.A., Citibank, N.A., Goldman Sachs Bank USA, HSBC Bank USA, N.A., Mizuho Bank, Ltd. and MUFG Union Bank, N.A.