Certain subsidiaries of Spruce Power, an owner and operator of distributed solar energy assets across the United States, closed on a $130 million non-recourse debt facility provided by Barings. The new debt facility refinances the company’s term loan of $125 million and provides for a net injection of incremental capital.
“Spruce is proud to announce the execution and closing of the refinance of its SP4 facility. This transaction achieves a favorable balance of capitalizing on the company’s strong asset performance and retention of asset level cash flows for our shareholders,” Joe Pettit, vice president of corporate development at Spruce, said. “Additionally, I’m pleased to announce a new relationship with Barings, who brings deep industry expertise that is supportive of Spruce’s mission to power our customers’ clean and efficient energy use.”
“We are pleased to start a great partnership with Spruce to support the company’s innovative business model and growth trajectory, as we seek to deliver attractive risk-adjusted returns to our clients,” Burak Cetin, managing director and head of private residential and consumer asset finance at Barings, said.
The $130 million new debt facility was rated A+ by Kroll and priced at a fixed loan rate of 6.889%. The initial balance of the new debt facility represents a 69% advance rate of ADSAB (contracted cash flows available for debt service discounted at 6%).
The new debt facility’s collateral pool consists of cash flows from over 22,000 solar contracts, the majority of which are variable rate PPAs indexed to retail electric rates of California investor-owned utilities. The refinancing transaction provides for an injection of incremental capital into the company of over $6 million, net of fees and inclusive of positive value realized in the simultaneous termination of interest rate swaps underlying the SP4 facility.
Santander US Capital Markets served as the sole structuring agent on the transaction.
