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Vivint Solar closes $811M debt financing of solar asset backed notes

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Vivint Solar closes $811M debt financing of solar asset backed notes

Vivint Solar Inc. announced June 11 the closing of its $811 million debt financing of solar asset backed notes comprised of two separate transactions, lowering total credit spreads by approximately 160 basis points.

The proceeds will be used for repayment of outstanding balance of certain existing debt facilities of the company and its subsidiaries and for general corporate purposes.

Vivint Solar's chief commercial officer and head of capital markets, Thomas Plageman, said the financing simplifies the company's term debt structure and will allow it to repay more expensive outstanding loans, increase advanced rates, lock in its fixed borrowing rates and create additional liquidity for its business.

Of the $811 million, Vivint Solar Financing V LLC issued the first issuance of $466 million of series 2018-1 notes to qualified institutional buyers. The issuance comprised $400 million of 4.73% series 2018-1 class A notes and $66 million of 7.37% series 2018-1 class B notes.

Credit Suisse Securities (USA) LLC and Citigroup Global Markets Inc. acted as joint book-running managers and co-structuring agents for the series 2018-1 notes. Merrill Lynch Pierce Fenner & Smith Inc., Deutsche Bank Securities Inc. and SunTrust Robinson Humphrey Inc. served as co-managers.

The remaining $345 million of series 2018-2 notes were issued by Vivint Solar Financing IV in a private placement arranged by Credit Suisse. The issuance comprised of $296 million of series 2018-2 class A notes and $49 million of series 2018-2 class B notes. The Vivint subsidiary entered into an interest rate swap concurrent with issuance of the series 2018-2 notes that results in an implied all-in interest rate of approximately 5.95%.The class B notes will bear an interest of 4.75% or, if not 2018-2 class A notes are outstanding, 2.95%.

The 2018-1 Notes and the 2018-2 Notes are secured by, and payable solely from the cash flow generated by, the membership interests that will be owned by Vivint Solar Financing V and Vivint Solar Financing IV. Series 2018-1 notes have an anticipated repayment date of Oct. 30, 2028, while series 2018-2 notes have an expected maturity date of Aug. 29, 2023.

On a combined basis, both fundings provide back-leverage financing for a portfolio of 16 tax equity funds and one wholly owned subsidiary that own 575 MW.