Vivint bags $200m loan as it moves beyond SunEd

Vivint Solar announced a new $200m term loan facility with unnamed lenders, as it seeks to regain the market’s confidence in the wake of its failed deal with SunEdison.

“This is the first step in a series of anticipated financing activities that were put on hold as a result of the now-terminated SunEdison merger,” the company says.

Earlier this month Vivint Solar surprised the US solar industry by announcing it had terminated SunEdison’s buyout of the Utah-based company, and shortly thereafter confirmed it had filed a lawsuit against SunEdison for “willful breach” of the deal.

Since then, Vivint filed its 2015 annual report, revealing the heavy price it paid last year for being tied up in an acquisition that never came to fruition. Among the tasks Vivint effectively set aside were arranging new funding and hiring new workers.

The company must now revive itself. To that end, it says, it closed a $200m term facility on 14 March, providing it with both "immediate liquidity" and longer-term finance.

"Now that we are free from the constraints of the terminated SunEdison merger agreement, we have demonstrated our ability to rapidly access the capital markets for flexible, term-debt financing to support our continued growth,” says Thomas Plagemann, head of capital markets at Vivint Solar.

The non-recourse facility is secured by the cash flows from Vivint’s portfolio of installed residential solar systems.

While Vivint did not reveal the lenders involved, it did reveal the terms. The financing comes in two tranches – an initial, shorter-term tranche of $75m priced at LIBOR plus 5.5%; and a second $125m tranche at LIBOR plus 8%, which can be “drawn over time”.

The finance was structured to provide Vivint with “immediate liquidity” with the option to access more money later on to fund growth beyond 2016.

“We believe it provides significant flexibility as compared to several recently closed transactions in the residential solar market,” the company says. 

Shares of Vivint Solar rose 8% in early trading on Tuesday on the news, to $3.54, giving the company a stock market value of $340m. That compares to a stock price of $15.75 last summer after SunEdison’s acquisition plan was first announced.

For all its challenges, Vivint remained the second largest installer of residential PV systems in the US last year, trailing only sector leader SolarCity. However, it lost ground to rival Sunrun, and may cede its second-place position this year if it cannot quickly regain its footing.