Sunrun Targets $365M with Solar-Storage Securitisation

• Sunrun secures $365 million in its latest securitisation, boosting residential solar and battery systems across the U.S. and Puerto Rico. Clean energy financing takes a giant leap forward!

Sunrun, a U.S. residential solar and storage provider, announced a new securitisation deal aimed at raising USD 365 million. This marks the company's third issuance in 2023, involving two classes of publicly placed A+ rated notes and one class of BB rated notes. The securities are supported by a portfolio comprising 21,281 residential solar and battery systems spread across 19 states and Puerto Rico.

The deal includes Class A notes totaling USD 75 million and USD 290.4 million, with coupon rates of 5.49% and 5.88%, respectively. The expected weighted average life spans are 4.83 years for Class A-1 and 6.99 years for Class A-2, maturing on October 30, 2059. RBC Capital Markets structured the transaction, which is expected to finalize by September 26, with plans for additional non-recourse financing.

What key details support Sunrun's latest $365 million securitization deal?

Here are some key details supporting Sunrun's latest $365 million securitization deal:

- Portfolio Size and Composition: The securitization is backed by a substantial portfolio of 21,281 residential solar and battery systems, highlighting Sunrun's significant footprint in the renewable energy sector.

- Geographical Diversity: The systems are spread across 19 states and Puerto Rico, indicating a broad market reach and diverse revenue streams, which can reduce investment risk.

- Credit Ratings: The deal features two classes of A+ rated notes and one class of BB rated notes, which can attract different types of investors and reflects a robust credit quality structure for the securitization.

- Interest Rates: The coupon rates set at 5.49% for Class A-1 and 5.88% for Class A-2 are competitive, making the bonds appealing to investors seeking stable returns in the renewable energy financing space.

- Maturity Timeline: With weighted average lives of 4.83 years for Class A-1 and 6.99 years for Class A-2, the structure provides investors with a clear timeline for expected cash flows, which enhances the attractiveness of the investment.

- Investor Confidence: The structuring of this third issuance in 2023 suggests strong investor confidence in Sunrun's business model and future revenue, especially in light of the growing demand for residential solar solutions.

- Financial Strategy: The securitization deal not only raises capital but also aligns with Sunrun's strategy for non-recourse financing, providing additional financial flexibility without increasing direct liabilities.

- RBC Capital Markets Role: The involvement of a well-known investment bank like RBC Capital Markets further validates the deal's positioning in the financial market and could enhance investor trust in the transaction.

- Market Trends: This securitization aligns with broader market trends favoring sustainable investment and the increasing popularity of renewable energy, particularly in the residential sector as homeowners seek energy independence.

- Regulatory Environment: Supportive government policies and incentives for solar energy adoption may underscore the potential for continued growth in Sunrun’s customer base, reassuring investors of stable cash flow from the asset-backed securities.

Together, these factors contribute to a robust structure for Sunrun's securitization efforts, positioning it favorably within both the renewable energy market and the investment landscape.