Sunrun, the nation’s leading provider of clean energy as a subscription service, has announced the pricing of its first securitization of 2025, marking its 13th securitization since 2015. The transaction includes three classes of A-rated notes—Class A-1, Class A-2A, and Class A-2B—as well as a BB-rated Class B note, which was retained. The Class A-1 notes, valued at $102.0 million, and the Class A-2A notes, worth $276.5 million, were both marketed in a public asset-backed securitization, while the $250.0 million Class A-2B notes were privately placed.
The Class A-1 notes were priced at a 170 basis point (bps) spread, yielding 6.035% with a coupon of 5.99%. The Class A-2A notes were priced at a 200 bps spread, yielding 6.465% with a coupon of 6.41%. Both the Class A-1 and Class A-2A notes were oversubscribed, reflecting strong investor demand. These two classes have a weighted average spread of 192 bps, representing an improvement of 42 bps from Sunrun’s last securitization in September 2024.
The initial balance of the Class A notes represents a 65.3% advance rate on the securitization share of present value, calculated using a 6% discount rate. The expected weighted average life is 4.58 years for the Class A-1 notes and 7.12 years for the Class A-2A notes. Both classes have an anticipated repayment date of April 30, 2032, with a final maturity date of April 30, 2060. The securitization is backed by a diversified portfolio of 39,458 solar systems across 20 states, Washington D.C., and Puerto Rico, spanning 83 utility service territories.
“Sunrun’s first securitization transaction of 2025, the second largest in the industry’s history, demonstrates our continued strong execution in the capital markets. Our ability to consistently access deep pools of competitively priced capital to fuel growth is supported by the quality of our assets and our proven track record as an originator and servicer,” mentioned Danny Abajian, Sunrun’s Chief Financial Officer.
Spencer Hunsberger, Head of Energy Origination at ATLAS SP, stated “ATLAS SP was pleased to work with Sunrun again as the sole structuring agent on this securitization transaction. Through our deep partnership with Sunrun, we have demonstrated ATLAS’ unique capabilities to structure, place and commit to large transactions in an accelerated and efficient process for the capital markets. We look forward to continuing to support Sunrun as the solar industry continues to become more mainstream for securitized products.”
The average customer credit score in this portfolio is 738. Similar to previous transactions, Sunrun plans to secure additional financing using proceeds from the retained Class B notes, which is expected to increase the cumulative advance rate. The transaction is set to close by February 5, 2025. ATLAS SP Partners acted as the sole structuring agent and joint bookrunner, along with BofA Securities, Morgan Stanley, MUFG, and TD Securities. First Citizens Capital Securities and ING served as co-managers for the securitization.
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