SolarCity Corp (NASDAQ:SCTY) concludes a $100 million loan from several banks to finance fresh panel installations.
The renewable energy firm SolarCity Corp (NASDAQ:SCTY) in its Form 8-K filing with the Securities and Exchange Commission disclosed that, on June 7th, 2013, it has entered into financing with certain lenders.
SolarCity Corp (NASDAQ:SCTY) disclosed that for the loan arrangement, Credit Suisse Securities (USA) LLC, ING Capital LLC and Rabobank, N.A., acted as the joint lead arrangers while Credit Suisse Group AG (NYSE:CS), Cayman Islands Branch acted as administrative agent and collateral agent.
SolarCity Loan Terms
The $100 million loan is financed against certain periodic rents due under a master lease with a tax equity investor and customer payments in the post-lease period. The loan is non-recourse to SolarCity Corp (NASDAQ:SCTY) and matures on June 7, 2015.
The loan is an aggregation facility backed by high quality, long-term customer receivables that allow the renewal energy firm to deploy, aggregate and season a defined pool of assets.
The loan would bear interest at a rate per annum equal to an applicable margin of 3.25 percent plus the LIBOR rate for the applicable interest period.
The loan arrangement facilitates the company borrow up to $100,000,000 and also permits it to increase that commitment in an aggregate amount not exceeding an additional $50,000,000.
However, the enhanced facility would be subject to, among other things, the absence of any default under the loan documents governing the loan agreement and receipt of commitments from existing lenders or other financial institutions.
SolarCity Corp (NASDAQ:SCTY) is permitted to voluntarily prepay any outstanding loans under the loan agreement at any time without premium or penalty, other than customary “breakage” costs.
The loan agreement requires the renewal energy firm to pay, subject to certain exceptions, outstanding borrowings with: (i) a portion of the annual excess cash flow; (ii) certain rent prepayment amounts received under the master lease; and (iii) 100 percent of the net cash proceeds of certain asset sales and casualty and condemnation events. The entire principal amount is due on the second anniversary of the closing date.
Loan as Sequel to Lease Financing Arrangement
The loan arrangement follows a deal SolarCity Corp (NASDAQ:SCTY) made with Goldman Sachs in May. The deal with Goldman Sachs Group, Inc. (NYSE:GS) would help SolarCity to offer over $500 million in lease financing for residential and commercial solar projects. The lease financing was good for an estimated 100 MW. SolarCity Corp (NASDAQ:SCTY) claimed this program to be the largest of its kind announced in the U.S. for homeowner rooftops.
Serial entrepreneur Elon Musk currently heads electric-car maker Tesla Motors Inc (NASDAQ:TSLA) and chairs SolarCity Corp (NASDAQ:SCTY). The renewable energy firm’s shared debuted on the Nasdaq in December at an IPO price of $8 and currently quotes at $34.03