Securitized PV 'set for breakthrough'

Securitized solar is about to get a lot bigger in the US, predicts a financier at the centre of SolarCity’s landmark securitizations.

SolarCity's two securitizations to date were "very small" by the standards of the asset-backed securities market, acknowledges Steve Viscovich, managing director for securitized products at Credit Suisse Securities, who was at the centre of both.

“But,” says Viscovich, “I think in very short order we’ll start to see deals three times that [size].”

Credit Suisse acted as sole structuring agent and sole bookrunner for both of SolarCity’s securitizations. It has also invested in other distributed PV companies known to be contemplating securitization, including SunRun.

California-based SolarCity, the largest residential PV installer in the US, last year raised $54.4m through the first-ever sale of solar asset-backed notes with an investment-grade rating.

In April of this year SolarCity raised another $70.2m through the securitization of existing solar assets.

The idea of securitizing assets and raising capital against them is nothing new in the distributed PV sector in the US, with many companies having transacted such deals privately with financiers.

But SolarCity’s deals were a breakthrough because its notes were deemed investment-grade by Standard & Poor’s, making them liquid in the secondary markets and therefore hugely more attractive to investors – and allowing SolarCity to raise money at a much lower cost.

SolarCity’s deals are “representative of what’s to come”, says Viscovich

“You’re going to see massive amounts of volume coming through.”

“If you look at the two deals we did, the cost of capital was about 4.5%, and it provided a significant amount of leverage relative to the cash flows that were coming off of [SolarCity’s assets].”

“We expect that to continue to improve – both from a leverage perspective, as well as from a cost of capital perspective,” he says.

Glennmont round raises €500m

01 September 2014 04:34 GMT

Scatec signs up for African projects

01 September 2014 03:57 GMT

Mainstream switches strategy

01 September 2014 12:29 GMT

Shunfeng snaps up Solarstrom

01 September 2014 10:13 GMT

IN DEPTH: The yieldco effect

01 September 2014 09:17 GMT

Sonnedix nabs first Japan PV funds

01 September 2014 04:49 GMT

China sales fail to help SolarOne

28 August 2014 02:04 GMT

US backs 300MW Myanmar solar

28 August 2014 01:05 GMT

Hareon unveils 600MW solar plan

28 August 2014 05:39 GMT

RET plan to 'smash investment'

28 August 2014 10:08 GMT

IEA warns of RE headwinds

28 August 2014 07:33 GMT

Kepco may build Korea-Japan cable

28 August 2014 06:22 GMT

NY governor weighs RE tax break

27 August 2014 10:48 GMT

Become a Recharge subscriber!

Or try our free trial.

Order Subscription

Already a member?


Recharge Monthly Magazine