Spruce Power Announces $130 Million Debt Financing
July 01 2024 - 7:30AM
Business Wire
Spruce Power Holding Corporation (NYSE: SPRU) (“Spruce” or the
“Company”), a leading owner and operator of distributed solar
energy assets across the United States, today announced that
certain of its subsidiaries have closed on a $130 million
non-recourse debt facility (the “New Debt Facility”) provided by
Barings LLC (“Barings”). The New Debt Facility refinances the
Company’s term loan of $125 million (the “SP4 Facility”) 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,” said Joe Pettit, Spruce’s VP of Corporate
Development. “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,” said Burak Cetin, Barings’ Managing Director and
Head of Private Residential and Consumer Asset Finance.
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 “Spruce Power 4 Portfolio”),
the majority of which are variable rate PPAs indexed to retail
electric rates of California investor-owned utilities. Since its
acquisition in March 2023, rapidly rising retail electric pricing
in California and other geographies across the Spruce Power 4
Portfolio has resulted in ADSAB accretion, and looking ahead, the
Company expects continued strong performance of variable rate PPAs
underlying the Spruce Power 4 Portfolio.
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 LLC served as the sole structuring
agent.
About Spruce Power
Spruce Power Holding Corporation (NYSE: SPRU) is a leading owner
and operator of distributed solar energy assets across the United
States. We provide subscription-based services that make it easy
for homeowners to benefit from rooftop solar power and battery
storage. Our power as-a-service model allows consumers to access
new technology without making a significant upfront investment or
incurring maintenance costs. Our company owns the cash flows from
over 75,000 home solar assets and contracts across the United
States. For additional information, please visit
www.sprucepower.com.
About Barings LLC
Barings is a $406+ billion* global investment manager sourcing
differentiated opportunities and building long-term portfolios
across public and private fixed income, real estate, and specialist
equity markets. With investment professionals based in North
America, Europe and Asia Pacific, the firm, a subsidiary of
MassMutual, aims to serve its clients, communities and employees,
and is committed to sustainable practices and responsible
investment. Learn more at www.barings.com.
*Assets under management as of March 31, 2024
Forward Looking Statements
Certain statements in this press release may constitute
“forward-looking statements” within the meaning of the federal
securities laws. Forward-looking statements can be identified by
the use of forward-looking words or phrases such as “anticipate,”
“believe,” “could,” “expect,” “intends,” “may,” “opportunity,”
“plans,” “goals,” “target” “predict,” “potential,” “estimate,”
“should,” “will,” “would,” “continue,” “likely” or the negative of
these terms or other words of similar meaning. These statements are
based upon our current plans and strategies and reflect our current
assessment of the risks and uncertainties. Forward-looking
statements in this release include statements regarding the future
direction of the Company and growth opportunities. These statements
are based on various assumptions, whether or not identified in this
press release and on the current expectations of management, and
are not predictions of actual performance. Forward-looking
statements are subject to a number of risks and uncertainties that
could cause actual results to differ materially from the
forward-looking statements, including but not limited to:
expectations regarding the growth of the solar industry, home
electrification, electric vehicles and distributed energy
resources; the ability to successfully integrate XL Fleet and
Spruce; the ability to identify and complete future acquisitions;
the ability to develop and market new products and services; the
effects of pending and future legislation; the highly competitive
nature of the Company’s business and markets; the ability to
execute on and consummate business plans in anticipated time
frames; litigation, complaints, product liability claims,
government investigations and/or adverse publicity; cost increases
or shortages in the components or chassis necessary to support the
Company’s products and services; the introduction of new
technologies; the impact of natural disasters and other events
beyond our control, such as hurricanes, wildfires or pandemics, on
the Company’s business, results of operations, financial condition,
regulatory compliance and customer experience; privacy and data
protection laws, privacy or data breaches, or the loss of data;
general economic, financial, legal, political and business
conditions and changes in domestic and foreign markets; risks
related to the rollout of the Company’s business and the timing of
expected business milestones; the effects of competition on the
Company’s future business; the availability of capital; and the
other risks discussed under the heading “Risk Factors” in the
Company’s Annual Report on Form 10 K for the year ended December
31, 2023 filed with the SEC on April 9, 2024, subsequent Quarterly
and Annual Reports on Form 10-Q and Form 10-K, respectively, and
other documents that the Company files with the SEC in the future.
If any of these risks materialize or our assumptions prove
incorrect, actual results could differ materially from the results
implied by these forward-looking statements. These forward-looking
statements speak only as of the date hereof and the Company
specifically disclaims any obligation to update these
forward-looking statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20240701266202/en/
For More Information Investor Contact:
investors@sprucepower.com Head of Investor Relations: Bronson
Fleig
Media Contact: publicrelations@sprucepower.com
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