Sunrun prices USD-230m securitisation of residential solar assets

US residential solar and storage provider Sunrun (NASDAQ:RUN) has priced a securitisation of leases and power purchase agreements (PPAs) at USD 230 million (EUR 214m) in total, the company announced on Wednesday.

The securitisation was issued with a single class of notes priced at a 6.27% coupon and representing a 6.328% yield, with a weighted average life of seven years and final maturity of February 1, 2055. The fact that the assets have 13.25 years of remaining contractual life and that the vast majority of them have already reached the tax equity fund ‘flip point’ has allowed for the structure to be issued without an Anticipated Repayment Date (ARD), Sunrun noted.

The transaction is expected to close by April 17, 2024.

“The latest ABS [Asset-Backed Security] transaction was priced at a credit spread of 195 basis points, a 37.5 basis point improvement from Sunrun’s most recent privately placed senior securitisation in February and 45 basis points lower than Sunrun’s securitisation in September 2023. The latest execution represents the lowest spread achieved for similarly rated transactions across the sector since 2021, a testament to Sunrun’s strong track record,” commented Danny Abajian, Sunrun’s Chief Financial Officer.

The notes are backed by a portfolio of 27,094 rooftop solar arrays distributed across 19 states and Washington DC and 65 utility service territories. Sunrun owns this portfolio jointly with National Grid, which will be receiving the majority of cash flows through 2042.

(USD 1.0 = EUR 0.930)

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