Sunrun, a provider of residential solar energy solutions, has priced $629 million in the securitization of leases and power purchase agreements.
ATLAS SP Partners was the sole structuring agent and served as joint book-runner alongside BofA Securities, Morgan Stanley, MUFG, and TD Securities. First Citizens Capital Securities and ING acted as co-managers for the securitization. This marks the company’s 13th securitization since 2015 and its first issuance in 2025.
The transaction was structured with three classes of A-rated notes and a single class of BB-rated notes, which were retained. The $102 million Class A-1 notes and the $276.5 million Class A-2A notes were marketed in a public asset-backed securitization, while the $250 million Class A-2B notes were privately placed.
The Class A-1 and Class A-2A notes were oversubscribed and carried coupons of 5.99% and 6.41%, respectively. The Class A-1 notes are priced at a spread of 170 bps and a 6.035% yield. The Class A-2A notes are priced at a spread of 200 bps and a 6.465% yield.
Class A-1 and Class A-2A have a weighted average spread of 192 bps, representing an improvement of 42 bps from Sunrun’s 2024-3 asset-backed securitization in September 2024. The initial balance of the Class A notes represents a 65.3% advance rate on the Securitization Share of ADSAB (present value using a 6% discount rate).
The expected weighted average life is 4.58 years for the Class A-1 notes and 7.12 years for the Class A-2A notes. Both classes of notes have an anticipated repayment date of April 30, 2032, and a final maturity date of April 30, 2060.
The notes are backed by a portfolio of 39,458 systems distributed across 20 U.S. states, Washington D.C., Puerto Rico, and 83 utility service territories. The transaction is expected to close by February 5, 2025.
According to Mercom’s recently released Annual and Q4 2024 Solar Funding and M&A report, in 2024, announced debt financing came to $18.8 billion, 6% lower than $20 billion in 2023. Securitization deals were a key contributor, with a record $5 billion in 16 deals.
In July last year, d.light, a provider of off-grid solar solutions, closed a securitization facility to purchase $176 million of receivables in Kenya, Tanzania, and Uganda. Africa Frontier Capital, a social impact-focused asset management company, provided the funding.
