SolarCity has wrapped up an innovative financing arrangement. The company announced it has completed a securitization of its distributed energy assets, pocketing more than $54.4 million in financing. That facility is secured by a pool of the company's solar energy contracts. The deal is reported to be the first instance of a borrower drawing a loan backed by such assets.
The funding was effected via a private placement effected with sole structuring agent and book runner Credit Suisse. SolarCity is borrowing the money at an interest rate of 4.8%, and the facility matures in December 2026.
In the press release announcing the news, the company quoted CFO Bob Kelly as saying that "securitization gives us access to a new source of capital at a lower cost, and it allows us to more closely align our assets and liabilities." SolarCity offers fixed-price contracts, which mirror the fixed-rate structure of the debt facility.
At the end of its most recently reported quarter, the company had $136 million in cash and short-term investments and $250 million in long-term debt.
The article SolarCity Completes Securitization originally appeared on Fool.com.Fool contributor Eric Volkman has no position in any stocks mentioned. The Motley Fool recommends and owns shares of SolarCity. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.