Benzinga | Jul 22, 2021 06:56AM EDT

Sunnova Launches Its Green Financing Framework and Prices a $212M Securitization of Residential Solar and Battery Loan Agreements

Sunnova Energy International Inc. ("Sunnova") (NYSE:NOVA), today announced the pricing of its fourth solar loan securitization and its tenth residential solar securitization. Sunnova also announced the launch of a new green financing framework (the "Green Financing Framework") that will guide Sunnova's investments in new and existing projects that have environmental benefits.

"This securitization, priced at a 1.82% blended coupon, represents Sunnova's highest-rated, lowest cost of capital issuance to-date," said Robert Lane, Executive Vice President, Chief Financial Officer of Sunnova. "It is the second transaction structured to align asset debt service with asset cash flows, increase free cash flow to Sunnova, and accelerate the issuance of a bullet-maturity green bond."

"Through our energy services, we are working to accelerate our ESG impact and to create shared value for our customers, employees, communities, partners, and investors," said Kelsey Hultberg, Executive Vice President, Chief of Staff of Sunnova. "Consistent with our commitment to sustainable business practices and advancing corporate social responsibility within the solar industry, we are proud to launch our Green Financing Framework which will guide the issuance of our green financings."

The Green Financing Framework underscores Sunnova's commitment to environmental sustainability, allows Sunnova to demonstrate its qualifications to investors who seek third-party assessed renewable energy investment opportunities, and will diversify Sunnova's access to capital. The Green Financing Framework has been subject to an independent external assessment by CICERO Shades of Green, which has classified the Green Financing Framework as Dark Green--its highest level. Under the Green Financing Framework, financings will be required to meet internal eligibility criteria that align with the International Capital Market Association's Green Bond Principles ("Green Bond Principles"), and net proceeds from any financings may be used for the capital investment, research, development, acquisition, manufacturing, distribution, maintenance and operation of solar energy and storage systems and enabling technologies for solar energy storage and optimization. The Green Financing Framework and CICERO Shades of Green's Second Opinion can be found here.

Mr. Lane added, "Sunnova's high-quality residential solar assets and superior customer service continue to realize industry-leading costs of capital. On this 2021-B transaction, we achieved spreads of 80 bps and 120 bps for the AA- and the A- tranches, respectively, over the interest rate benchmark. This represents Sunnova's best pricing to-date for a solar and storage loan asset securitization."

The securitization consists of $106.2 million in AA- (sf) rated 1.62% notes and $106.2 million in A- (sf) rated 2.01% notes. The notes carry a weighted average life to the Anticipated Repayment Date of July 20, 2028, approximately 5.07 years, and have a final maturity of July 20, 2048.

The notes are backed by a diverse portfolio of 6,435 solar rooftop systems distributed across 19 states and territories. The weighted average customer FICO score of the related customers at the time of origination is 735. The transaction is expected to close by July 28, 2021, subject to customary closing conditions.

Credit Suisse was the sole structuring agent and bookrunner for the securitization, and Popular Securities acted as co-manager.

The notes have not been and will not be registered under the Securities Act of 1933, as amended, or applicable state securities laws, and, unless so registered, such securities may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.

This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall it constitute an offer, solicitation of an offer or sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. Any offer of the notes will be made only by means of a private offering circular.