Tesla/SolarCity plans $340 million securitization of distributed solar

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Even while Tesla has backed off of the aggressive growth pattern that SolarCity was on, the company is still showing its dynamism in financial deals, and continuing to provide a vision for the future.

On the same day that Tesla announced that it has provided electricity to a hospital in Puerto Rico, the Kroll Bond Rating Agency issued a report on what may be the largest solar securitization yet from the company that pioneered the practice in 2013.

According to the report, Tesla/SolarCity is preparing to issue $340 million through two tranches of bonds, backed by leases and power purchase agreements on distributed solar assets.

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The bonds formally mature in 30 years, but Tesla expects to repay them by April 2028. Kroll provided an A- rating for the first class of $265 million in notes, but has not yet rated $75 million worth of bonds in the second class. No interest rate has yet been assigned.

These notes will be backed by $483 million in forthcoming payments on leases and power purchase agreements, with leases making up 57% of that balance. Kroll estimates that the bonds are around 16% over-collateralized.

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