SolarCity announced Monday that Elon Musk’s Space Exploration Corp (SpaceX) had agreed to purchase $90 million worth of its solar bonds. The residential solar installer said the bonds are tied to monthly payments from thousands of solar customers across the country. Elon Musk is the founder and CEO of SpaceX, and chairman and largest shareholder of SolarCity.
SolarCity offering $93 million solar bonds at 2% interest rate
According to the San Mateo-based company’s regulatory filing, it is selling $93 million solar bonds with a 2% interest rate, due to mature in March 2016. SpaceX is purchasing almost all ($90 million) of those bonds. SolarCity said the space technology company bought the bonds online, the same way any U.S. investor could.
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SpaceX CFO Bret Johnsen reviewed the investment materials, and then it took him less than 10 minutes to set up an account and order the bonds. Solar bonds offer investors an opportunity to earn higher returns than comparable investments. It allows SolarCity to raise capital at a lower cost to fuel its growth. In February, the solar installer raised $300 million from Google to cover the upfront cost of installations for thousands of homeowners.
SolarCity raising funds to fuel its exponential growth
In January, the company raised $200 million financing from Credit Suisse to fuel the growth of its MyPower program. Earlier this month, SolarCity teamed up with securities distributor Incapital to offer solar bonds to investors. Incapital and SolarCity agreed to sell up to $100 million of solar bonds to everyday investors through a network of more than 500 financial institutions.
Separately, SolarCity announced over the weekend that it was hiring 300 additional employees to boost its inside sales team in Roseville, California. The company hosted a job fair on Saturday to start filling those positions. SolarCity already employs more than 475 workers at its Roseville office. The residential solar installer said it would beef up its call center sales team that offers phone consultations to people interested in green energy.
SolarCity shares fell 0.51% to $50.31 in pre-market trading Tuesday.