SolarCity recently announced its intent to offer a private placement of $54.4 million of an "aggregate principal amount of Solar Asset Backed Notes, Series 2013-1 with a scheduled maturity date of December 2026;" see the full SEC document for details. Within the solar sector, the use of securitization is primarily twofold–to improve liquidity and spur demand. SolarCity is the "first securitized portfolio of distributed solar assets," says GTM Research's Shayle Kann. The next step in the process is for a ratings agency to provide a rating for the pooled asset, Kann noted. Once rated, investment banks can market the asset to institutional investors. The investment bank Baird noted a positive initial reaction for securities that "could reduce SCTY's cost of capital and increase company returns," adding that it was good news for SolarCity and the solar industry. Rob Day of Black Coral Capital noted, "Lower financing costs result in more affordable solar for homeowners; deeper capital pools enable developers to scale faster; and stable, long-term solar assets create attractive returns for investors. SolarCity is the first mover here, but I expect they'll be soon followed by other financing platforms like Clean Power Finance, OneRoof, Sunrun and the rest." 1
1. Solar Milestone: SolarCity Introduces Securitization to Distributed PV, Eric Wesoff, November 4, 2013, www.greentechmedia.com
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