Fresh off the termination of the SunEdison merger, the second-largest installer of residential solar in the United States is back to raising cash. Last Monday Vivint Solar closed on a US$200 million non-recourse term facility, which it says is the first in a series of fundraising activities it intends to undertake.
"Now that we are free from the constraints of the terminated SunEdison merger agreement, we have demonstrated our ability to rapidly access the capital markets for flexible, term-debt financing to support our continued growth, stated Vivint Solar Executive VP and Head of Capital Markets Thomas Plagemann.
The funding is available in two tranches: a short-term $75 million tranche at London Interbank Offered Rate (LIBOR) + 5.5%, and a second tranche of $125 million that can be drawn over time. The second tranche will be LIBOR + 8.0% and the term will extend to four years on the entire facility.
Vivint says that this flexible structure allows it to access an attractive advance rate and immediate liquidity, while still providing the option to fund growth beyond 2016. The company notes that it will use the funds for a variety of purposes, including funding new installations for customers but also additional business initiatives
Mercom Capital CEO Raj Prabhu notes that the rates are likely on the high side, which is far from surprising given the recent merger termination. I think access to capital was more important than interest rates, Prabhu told pv magazine. On the positive side, it is good that they are able to do that so fast.