Sunnova Closes Securitization of Residential Solar Systems

Sunnova Energy International, one of the leading U.S. residential solar and storage service providers, announced that it closed its securitization of leases and power purchase agreements on November 30, 2020.

“We are pleased to report the closing of our most successful asset backed securitization to date,“ said William J. (John) Berger, Chief Executive Officer of Sunnova. “Being able to deliver a securitization with the highest combined advance rate and lowest blended yield for a securitization in company history is a direct result of our proven track record, well-capitalized corporate balance sheet, strong recurring long-term contracted cashflows and focus on providing best-in-class customer service. This securitization further suggests a discount rate of PV4 on our Net Contracted Customer Value as it drives our all-in cost of capital even lower, further bolsters our cashflows and positions Sunnova to continue its exceptional growth into the new year and beyond.”

The two-tranche securitization includes $209.1 million in A- (sf) rated 2.73% notes at a 78.0% advance rate and $45.6 million in subordinated BB- (sf) rated 5.47% notes at a 17.0% advance rate. Advance rates are calculated relative to the securitization share of the aggregate discounted solar asset balance.

The notes are backed by a diverse portfolio of over 13,000 solar rooftop systems distributed across 19 states, Guam, Puerto Rico, and the Commonwealth of the Northern Mariana Islands. The weighted average customer FICO score of the related customers at the time of origination is 741. Sunnova used the proceeds from the sale of the notes for the repayment of one or more currently existing financing arrangements of Sunnova’s subsidiaries and intends to use the remaining proceeds for the payment of expenses related to the offering of the notes and for general corporate purposes.

Credit Suisse was the sole structuring agent and bookrunner for the securitization.

In addition, Sunnova announced today the closing of its underwritten public offering (the “equity offering”) of 7,000,000 shares of Sunnova’s common stock, par value $0.0001 per share (the “common stock”), which consists of 3,500,000 shares of common stock offered by Sunnova and 3,500,000 shares of common stock offered by a fund affiliated with Newlight Partners (the “Selling Stockholder”) at a price to the public of $37.00 per share. The equity offering included a 30-day option for the underwriters to purchase an additional 525,000 shares of common stock from each of Sunnova and the Selling Stockholder, which the underwriters exercised in connection with the closing of the equity offering.

The net proceeds from the sale of shares of the common stock in the equity offering, after deducting underwriting discounts and commissions and offering expenses payable by Sunnova, were approximately $142.6 million. Sunnova did not receive any proceeds from the sale of the shares by the Selling Stockholder in the equity offering. Sunnova intends to use the net proceeds from the equity offering to acquire solar equipment, for the repayment of indebtedness, including to redeem approximately $39.0 million aggregate principal amount of the 9.75% convertible senior notes due 2025 (the “convertible senior notes”), excluding accrued and unpaid interest, and for working capital purposes.

Goldman Sachs & Co. LLC, BofA Securities, J.P. Morgan and Credit Suisse acted as joint book-running managers of the equity offering.