SunPower prices $400 million in bonds

On Thursday, SunPower announced that it has priced US$400 million in bonds, in a sale to institutional buyers which it expects to close next week. SunPower parent company Total will buy $100 million of these notes.

The 4% convertible senior notes will mature in 2023, and the company has granted options for the purchase of up to $25 million more bonds within 30 days.

The company expects to receive from $391-$415 million from the sale, and has said that it will use the funds for a variety of purposes, including supporting its holdCo and yieldCo strategies, capital expenditures, working capital, retirement of existing debt and “to fund potential acquisitions of complementary businesses”.

SunPower’s latest quarterly results showed progress in both its manufacturing and PV projects business, with a new factory in the Philippines moving ahead on schedule and progress on two solar projects over 100 MW. However, the company also reported a $56 million loss.

Two factors lead SunPower to require additional revenue. First, the movement of projects to yieldco and holdco vehicles creates a need for more capital. Second, like most large PV companies SunPower’s stock value fell this summer and has yet to recover fully.

Many large American PV makers and developers have issued bonds in the past few months, as a means to address these issues.