SolarCity Increases Credit Facility to $200M after Sun Securitization
NEW YORK (TheStreet) -- SolarCity
In November, the company pioneered the first asset-backed security-tied to rooftop solar energy production in a $54.43 million securitization.
SolarCity said on Friday it has increased the size of its three-year revolving credit facility to $200 million. The facility bears an interest rate of 2.25% over Base Rate or 3.25% over the London Interbank Offered Rate (LIBOR). Bank of America Merrill Lynch
"This expanded credit facility provides the upfront working capital to meet our operational growth projections," Bob Kelly, SolarCity's chief financial officer, said in a statement. "The facility represents the continued implementation of our financial strategy to drive down the cost of capital and increase the sources of capital for our distributed energy business."
SolarCity shares were up nearly 1% in pre-market trading to $57.45.
The company said in previous interviews with TheStreet that it doesn't expect to participate in the securitization market through year-end, however, it expects to tap the market regularly in 2014 as the company grows its rooftop solar installations.
SolarCity's first securitization deal pooled solar contracts from over 5,000 residential and commercial photo-voltaic installations, and carried an interest rate roughly half of SolarCity's previous financing.
SolarCity of San Mateo, Calif., has a business model that differs from solar panel and plant manufacturers such as First Solar
MidAmerican Energy, one of the nation's largest utilities and a subsidiary of Berkshire Hathaway (BRK.A), has been an acquirer of production from solar plants built by First Solar and SunPower.
SolarCity, in contrast, installs residential and commercial rooftop panels to creditworthy customers at low initial costs in return for a long-term contract to buy the energy derived from the rooftop panels.
Shares of SolarCity have gained over 300% year-to-date on improving financial results and a strengthening of the company's capital position through stock and bond offerings.
-- Written by Antoine Gara in New York