UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 1.01. | Entry into a Material Definitive Agreement. |
On May 16, 2023, a wholly owned, indirect subsidiary (the “Issuer”) of Sunnova Energy International Inc., a Delaware corporation (the “Company”), entered into an indenture (the “Indenture”) with Wilmington Trust, National Association, as the indenture trustee, and completed an issuance of solar loan backed notes that were issued pursuant to the Indenture (the “Transaction”).
The Issuer issued $174,900,000 aggregate principal amount of 5.30% Solar Loan Backed Notes, Series 2023-A Class A (the “Class A Notes”), $80,100,000 aggregate principal amount of 5.60% Solar Loan Backed Notes, Series 2023-A Class B (the “Class B Notes”) and $31,700,000 aggregate principal amount of 6.00% Solar Loan Backed Notes, Series 2023-A Class C (the “Class C Notes” and, collectively with the Class A Notes and Class B Notes, the “Notes”). The Notes have an anticipated repayment date of May 22, 2028.
The Notes were offered within the United States only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), to institutional accredited investors under Section 4(a)(2) of the Securities Act, and to persons outside of the United States in compliance with Regulation S under the Securities Act. The Notes have not been registered under the Securities Act or the securities laws of any other jurisdiction. The Class A Notes, the Class B Notes and the Class C Notes have been rated AA- (sf), A- (sf) and BBB (sf), respectively, by Kroll Bond Rating Agency, LLC and AA-sf, A-sf and BBBsf, respectively, by Fitch Ratings, Inc.
The Collateral
The Notes are secured by the trust estate which consists primarily of all right, title and interest of the Issuer in a portfolio of solar loans made to consumers for the purpose of installing residential photovoltaic and/or energy storage systems. Sunnova ABS Management, LLC, a Delaware limited liability company and a wholly owned, direct subsidiary of the Company (the “Manager”), will act as manager and servicer pursuant to the terms of a Management Agreement and Servicing Agreement between the Issuer and the Manager. The Manager will provide, or cause to be provided, all operations, maintenance, administrative, collection and other management and servicing services for the Issuer and in respect of the solar loans.
Events of Default and Amortization Events
The Indenture contains events of default that are customary in nature for solar securitizations of this type, including, among other things, (a) the non-payment of interest, (b) material violations of covenants, (c) material breaches of representations and warranties and (d) certain bankruptcy events. An event of default will also occur with respect to the Notes if they are not paid in full at their rated final maturity. The Notes are also subject to amortization events that are customary in nature for solar securitizations of this type, including (a) the occurrence of an event of default, (b) the bankruptcy or insolvency of the Manager, (c) failure to deposit the amount required to be deposited in the collections account, (d) the amount of funds available for distribution falling below certain levels and (e) the cumulative default level rising above certain levels. The occurrence of an amortization event or an event of default could result in accelerated amortization of the Notes, and the occurrence of an event of default could, in certain instances, result in the liquidation of the collateral securing the Notes. In connection with the Transaction, Sunnova Energy Corporation, a wholly owned, direct subsidiary of the Company, issued a performance guaranty covering (a) the performance of certain obligations of its affiliates, (b) the performance obligations of the Manager under the Management Agreement and Servicing Agreement and (c) the payment of certain expenses incurred by the Issuer and the Indenture Trustee.
The foregoing description of the Indenture is qualified in its entirety by reference to the full text of the Indenture, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated into this Item 1.01 by reference.
Use of Proceeds
The Company intends to use the proceeds from the sale of the Class A Notes, the Class B Notes and the Class C Notes to finance or refinance, in whole or in part, existing or new investments and expenditures by the Company and its subsidiaries related to one or more of the criteria listed in the Company’s Green Financing Framework, including to simultaneously repay a portion of one or more currently existing financing arrangements of the Company’s subsidiaries.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information relating to the Transaction set forth in Item 1.01 above is incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
The following materials are filed as exhibits to this Current Report on Form 8-K.
| Exhibit |
Description | |
| 10.1* | Indenture, by and between Sunnova Helios XI Issuer, LLC and Wilmington Trust, National Association, as indenture trustee, dated as of May 16, 2023 | |
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document) | |
| * | Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Items 601(a)(5) and 601(b)(10). The Company agrees to furnish a copy of any omitted schedule or exhibit to the SEC upon request. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SUNNOVA ENERGY INTERNATIONAL INC. | ||||||
| Date: May 16, 2023 |
By: | /s/ David Searle | ||||
| David Searle | ||||||
| Executive Vice President, General Counsel | ||||||