SolarCity Shines on Private Note Placement

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Solar installer SolarCity Corp. (NASDAQ: SCTY) announced Monday morning that it intends to offer $54.425 million in Solar Asset Backed Notes, Series 2013-1, subject to market condidtions. The notes mature in December 2026 and are available only qualified institutional buyers and other qualified investors.

SolarCity said the notes will be secured by a pool of photovoltaic systems and related leases and power purchase agreements and ancillary rights and agreements owned by SolarCity LMC Series I, LLC.

The company recently sold 3.91 million shares of common stock at $46.54 a share and $230 million 2.75% convertible notes maturing in 2018. SolarCity raised nearly $400 million in the two capital raises and said it intended to use the proceeds for general corporate purposes, including working capital, capital expenditures, potential acquisitions, and strategic transactions.

The placement announced today will allow SolarCity to monetize some of the cash it expects to receive over the next several years from the power-purchase and leasing deals it signs with residential and commercial customers. Another advantage is that assets are being transferred to SolarCity LMC Series I, LLC, and will not be backed by SolarCity itself.

Shares of SolarCity are up about 16.5% at $63.82 in mid-afternoon trading Monday after posting a new 52-week high of $65.25 earlier today. The 52-week low is $9.20. More than 9 million shares have traded hands so far today.