SolarCity Rooftop Solar Lease Securitization Advances

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by Sean Kidney
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US firm SolarCity (SCTY) announced last week that it was seeking to make a private placement of a $54.4 million, 13 year bond backed by cash flows from rooftop solar leases. SolarCity is the second-largest U.S. solar company by market capitalization.

Lead manager Credit Suisse (CS) has been working on this deal for some time now, which will now only be eligible to be sold to big, qualified investors. It’s been a race this year between them and a US bank to get the first solar rooftop loan securitization our the door. Looks like the Swiss may win; we’re hoping they will start a trend (these are dinky-di climate bonds, after all).

The Financial Times is calling it the world’s first “sunshine-backed bond”. Very amusing, although not quite correct; SunPower’s (SPWR) 2010 Italian Andromeda bond has that tag.

According to the Financial Times story, Credit Suisse had a tough time convincing rating agencies to evaluate the bonds because of the lack of historical data; Standard & Poor’s have apparently given it a reasonable rating in the end – details still to be released.

Sean Kidney is Chair of the Climate Bonds Initiative, an “investor-focused” not-for-profit promoting long-term debt models to fund a rapid, global transition to a low-carbon economy. 


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