Vivint Solar, Inc. (NYSE:VSLR) Files An 8-K Entry into a Material Definitive Agreement

Vivint Solar, Inc. (NYSE:VSLR) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.

On January 5, 2017, Vivint Solar Financing III, LLC, a wholly-owned indirect subsidiary of Vivint Solar, Inc. (the “Company”), entered into a fixed rate loan agreement to which it may borrow up to an aggregate principal amount of $203.75 million with certain financial institutions for which Wells Fargo Bank, National Association is acting as administrative agent, collateral agent and depositary agent. Upon closing, the borrower incurred $203.75 million aggregate principal amount of borrowings. Proceeds of the loans will be used to (1) repay existing indebtedness under the Company’s existing aggregation facility with respect to the portfolio of projects being used as collateral for the new facility (the “Portfolio”), (2) fund a debt service reserve account, an inverter replacement reserve account and a supplemental reserve account, (3) pay transaction costs and fees in connection with the new facility and (4) make a distribution to the Company for working capital purposes.

Interest on borrowings under the fixed rate loan agreement accrue at an annual rate equal to 6.04% and is payable quarterly in arrears. Principal is amortized over the 18-year term of the agreement with scheduled quarterly payments due at the end of January, April, July and October of each year. Certain principal payments must also be paid upon the occurrence of certain events, including failure to meet certain distribution conditions, receipt of proceeds by the borrower or subsidiary guarantors in respect of casualties, and receipt of proceeds for purchased systems. Optional prepayments, in whole or in part, are permitted under the fixed rate loan agreement, subject to the payment of a make-whole amount. The make-whole amount is based on a calculation of the present value of the remaining payments due under the loans.

The fixed rate loan agreement includes customary events of default, conditions to borrowing and covenants, including negative covenants that restrict, subject to certain exceptions, the borrower’s, guarantors’ and borrower’s subsidiaries’ ability to incur indebtedness, incur liens, make fundamental changes to their respective businesses, make certain types of restricted payments and investments or enter into certain transactions with affiliates. A debt service reserve account was funded at closing in an amount and must thereafter be funded with any free cash flow as necessary to maintain a balance equal to at least the highest consecutive six months of scheduled debt service over the immediately succeeding five-year period or until the maturity date, whichever is shorter. In addition, the borrower is required to maintain an average debt service coverage ratio of 1.2 to 1 to make distributions (and must also satisfy other conditions to make distributions, including no defaults and the funding of certain reserves, either with cash collateral or letters of credit).

The obligations of the borrower are secured by a pledge of the membership interests in the borrower, all of the borrower’s assets, the assets and membership interests of the borrower’s directly-owned subsidiaries acting as managing members of the underlying investment funds and contracts (and rights thereunder) held by certain borrower affiliates relating to the purchase and sale of solar renewable energy credits.

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About Vivint Solar, Inc. (NYSE:VSLR)

Vivint Solar, Inc. primarily offers distributed solar energy, which is electricity generated by a solar energy system installed at or near customers’ locations to residential customers based on over 20-year contracts. The Company operates through two operating segments: Residential, and commercial and industrial market (C&I). Through its investment funds, the Company owns an interest in the solar energy systems the Company installs, and ownership of the solar energy systems allows it and the other fund investors to benefit from various local, state and federal incentives. The Company has a process that enables it to design and install a custom solar energy system that delivers customer savings. The Company is a licensed contractor in the markets the Company serves and is responsible for each customer installation. Upon completion, the Company schedules the required inspections and arranges for interconnection to the power grid.

Vivint Solar, Inc. (NYSE:VSLR) Recent Trading Information

Vivint Solar, Inc. (NYSE:VSLR) closed its last trading session 00.00 at 2.95 with 424,426 shares trading hands.

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