SunEdison to issue $500m debt

SunEdison says it plans to issue $500m in convertible senior notes due 2020 in a private placement, and will partly use net proceeds for its TerraForm Power yieldco subsidiary.

It did not say when the offering will occur.

Plans call for allocating between 70% and 80% to fund acquisitions, development and construction costs and debt repayment for solar projects to be contributed to TerraForm Power;, or operating solar projects held on its balance sheet consistent with its “retained value strategy.”

Remaining net proceeds will fund working capital, to accelerate growth of the business and for other general corporate purposes.

The company also intends to grant initial buyers a 30-day option to purchase an additional $100m aggregate principal amount of notes on the same terms and conditions.

SunEdison last week provided investors with more details about its yieldco vehicle.

TerraForm will begin life with an initial portfolio of 524MW – which includes a 135MW portfolio of distributed PV (nearly all of it in the US), and 389MW of utility-scale capacity, spread across the US, Chile, the UK and Canada.

TerraForm will have access to 900MW of “Call Right” projects owned by SunEdison, and it will have first crack at buying all of SunEdison’s future solar projects in the four countries represented in its initial portfolio.

SunEdison now has a 3.4GW pipeline of development-stage solar projects, and about 500MW under construction.

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