Sunnova Energy International has closed an aggregate $150 million in financing through an approximately $95 million revolving asset-based loan facility and a private placement of $55 million aggregate principal amount of convertible senior notes.
According to a related 8-K filing, Credit Suisse served as administrative agent for the revolver, which is an equipment finance facility. Access to this capital will allow Sunnova to fund its continued growth in customer count and battery storage sales, as well as fund the purchase of inventory that Sunnova intends to use to allow related solar energy systems to qualify for a 30% Federal investment tax credit by satisfying the 5% safe harbor method outlined in IRS notice 2018-59.
“Given strong operational momentum in the business, we now expect our 2020 customer growth to exceed expectations from even our third quarter call in October,” said William J. (John) Berger, chief executive officer of Sunnova. “These new debt facilities will enable us to finance the purchase of equipment, which will allow us to safe harbor the 30 percent ITC and give us access to additional working capital and asset level capital to fund our continuing growth.”
The equipment facility will provide just over $95 million of debt availability, all of which will be drawn by year end 2019 to fund equipment purchases, with a maximum facility size of approximately $138 million, subject to lender consent. The convertible notes private placement provides for the issuance of $55 million in corporate level debt, with an option to increase to $75 million if all parties consent, with a high degree of repayment flexibility for the company.
Sunnova intends to update guidance for 2020 customer growth no later than in connection with its fourth quarter 2019 earnings call.
Sunnova provides residential solar, battery storage and system protection services with customers across the U.S. and its territories.