KeyBanc Capital Markets Inc., the corporate and investment banking arm of Cleveland-based KeyCorp (NYSE: KEY), successfully closed a private placement of Senior Secured Notes (the “Notes”) for New Energy Solar, an Australian-based sustainable investment business. The issue was undertaken through a 100 percent owned U.S. subsidiary and the Notes have a weighted average life of 13.2 years and a final maturity in 2041. Proceeds from the Notes were used to recapitalize two operating solar assets and provide liquidity for future acquisitions. This marks New Energy Solar’s inaugural financing in the U.S. private placement market.
In conjunction with the Notes, the Portfolio also closed a $21.5 million Letter of Credit Facility provided by KeyBank National Association which satisfied Debt Service Reserve, PPA Security and Decommissioning Security requirements.
The two operating solar assets, Stanford & TID (the “Projects”), totaling 134.8 MWDC of solar generating capacity, were originally developed by SunPower and subsequently acquired by New Energy Solar at the Commercial Operation Date (“COD”). Both projects are located in Kern County, California. The Stanford project entered into a 25-year Power Purchase Agreement (“PPA”) with Stanford University that began in December of 2016. The TID project entered into a 20-year PPA with the Turlock Irrigation District that began in December of 2016.
“The strong interest in NES’s first debt issue in the US was very encouraging. There is considerable interest in the renewable energy sector. While the placement improves our financing structure, the Notes also provide liquidity to fund New Energy Solar’s continued growth. Our strategy is to continue to broaden and diversify our asset portfolio with key industry and finance partners,” said New Energy Solar, North American Executive Director Tom Kline.
“We were pleased to work with New Energy Solar on its inaugural U.S. institutional debt issue, illustrating the solar market continues to see strong demand from institutional investors,” said Aaron Klein, Director, Utilities, Power & Renewable Energy Investment Banking at KeyBanc Capital Markets. “We look forward to partnering on future opportunities as the company continues to build its portfolio.”
New Energy Solar | http://www.newenergysolar.com
KeyBanc Capital Markets | http://www.key.com