Largest Residential Solar Securitization in Industry History
Sunrun (Nasdaq: RUN), the leading provider of clean energy as a subscription service in the United States, has announced the pricing of a record-setting securitization. This $886.3 million securitization of leases and power purchase agreements marks the largest in Sunrun’s history and the largest residential solar securitization industry-wide.
Strong Market Performance and Investment Confidence
“Sunrun continues to set industry benchmarks, with our robust performance and ability to attract competitively priced capital,” said Danny Abajian, Sunrun’s Chief Financial Officer. The successful pricing reflects Sunrun’s proven track record as an originator and servicer, earning higher ratings from KBRA for comparable advance rates relative to precedent ABS transactions.
The transaction features two pari passu tranches of A+ rated notes (Class A-1 and Class A-2) and a single class of BB rated notes (Class B). The $443.15 million Class A-1 notes were marketed publicly, while the $443.15 million Class A-2 notes were privately placed. The Class A notes were priced with a coupon of 6.25%, with the Class A-1 notes achieving a 205bps spread and a 6.385% yield, an improvement of 35bps from Sunrun’s previous securitization in September 2023.
Diverse Portfolio and Future Financial Strategies
The notes are backed by a diversified portfolio of 48,628 solar energy systems distributed across 19 states, Washington D.C., and Puerto Rico, spanning 79 utility service territories. The weighted average customer FICO score is 741, indicating strong creditworthiness. The transaction is expected to close by June 11, 2024.
Sunrun anticipates raising additional subordinated subsidiary-level non-recourse financing, secured partly by distributions from the retained Class B notes. This strategy is expected to increase the cumulative advance rate obtained by Sunrun, further solidifying its position in the solar energy market.
Industry Leadership and Green Energy Policies
ATLAS SP Securities served as the sole structuring agent and joint bookrunner alongside J.P. Morgan Securities, Morgan Stanley & Co., MUFG Securities Americas, and RBC Capital Markets. Citigroup Global Markets and KeyBanc Capital Markets acted as co-managers for the securitization.
This milestone highlights Sunrun’s leadership in the solar energy market and its commitment to green energy policies. By securing competitively priced capital, Sunrun can continue to drive solar energy investment and advancements in solar technology, contributing to the broader energy market trends.
Source：globenewswire.com
