Sunrun Inc. has priced the securitization of leases and power purchase agreements with a principal amount of $204 million at a 4.00% yield, maturing on June 30, 2054.
The securities in the offering, known as Sunrun's solar-as-a-service, are backed by a portfolio of 14,377 solar rooftop systems distributed across 48 utility service territories, according to a May 31 news release. The initial balance represents an 80.3% advance rate relative to the aggregate discounted solar asset balance. The securitized leases and PPAs have been in service for six years on average, and are no longer subject to tax equity financing, according to Sunrun. This is the company's third such securitization of solar as a service.
The interest rate reflects a spread of 200 basis points over the benchmark swap rate at the time.
The advance rate is nearly 10 percentage points higher than the senior tranche in Sunrun's prior securitization and represents the highest advance rate for any similarly rated tranche in a solar lease and power purchase agreement transaction to date, according to the company, while the yield is the lowest for any solar lease and power purchase agreement transaction to date.
The transaction is expected to close by June 6.