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Credit Suisse, LibreMax Capital Provide $95MM Revolver to Sunnova Energy

January 02, 2020, 08:40 AM
Filed Under: Energy

Sunnova Energy International Inc. announced that it has closed an aggregate $150 million in financing through an approximately $95 million revolving asset-based loan facility and a private placement of $55 million aggregate principal amount of convertible senior notes (the “Convertible Notes Private Placement”). Access to this capital will allow Sunnova to fund its continued growth in customer count and battery storage sales, as well as fund the purchase of inventory that Sunnova intends to use to allow related solar energy systems to qualify for a 30 percent Federal investment tax credit (“ITC”) by satisfying the 5 percent safe harbor method outlined in IRS notice 2018-59.

“Given strong operational momentum in the business, we now expect our 2020 customer growth to exceed expectations from even our third quarter call in October,” said William J. (John) Berger, Chief Executive Officer of Sunnova. “These new debt facilities will enable us to finance the purchase of equipment, which will allow us to safe harbor the 30 percent ITC and give us access to additional working capital and asset level capital to fund our continuing growth.”

The Equipment Facility will provide just over $95 million of debt availability, all of which will be drawn by year end 2019 to fund equipment purchases, with a maximum facility size of approximately $138 million, subject to lender consent. The Convertible Notes Private Placement provides for the issuance of $55 million in corporate level debt, with an option to increase to $75 million if all parties consent, with a high degree of repayment flexibility for the company.

“We are pleased that our unlevered asset-level returns, inclusive of all dealer payments, were not sacrificed to achieve our current growth and continue to be stable and attractive, consistent with our prior performance,” said Berger. “This is a testament to our differentiated business model. We expect to continue the rapid growth of our industry-leading estimated net contracted customer value asset base as we maintain our focus on maximizing recurring cash flows. We see battery sales and attachment rates increasing faster than previously expected as an ever-growing number of large manufacturers ramp up new energy storage product launches. We also continue to see dealer and sub-dealer growth as more qualified dealers are drawn to our comprehensive and attractive product suite and our superior customer service. We are proud of the progress we made in 2019, which has created strong momentum for us as we move into 2020.”

Sunnova intends to update guidance for 2020 customer growth no later than in connection with its fourth quarter 2019 earnings call.

The lenders under the Equipment Facility include affiliates of Credit Suisse and LibreMax Capital, LLC.

Funds managed by Magnetar Capital and Tortoise Capital Advisors, L.L.C. purchased the convertible notes in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended.

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