AES Distributed Energy’s securitisation worth US$100 million

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

The solar industry’s sixth securitisation to date, due for launch by Colorado-based AES Distributed Energy, will be worth US$100 million, backed against the company’s portfolio of solar generation assets.

The offering follows four securitisations to date by SolarCity and one for Sunrun in what is becoming an emerging trend for the PV industry as solar becomes a more attractive proposition for the mainstream investment community.

The statistical rating organisation Kroll Bond Rating Agency (KBRA) put the US$100 million tag on the sale of a mixture of Class A and Class B notes. It will be split into US$92.5 million in Class A notes and the remaining US$7.5 million in Class B notes. The analysis is executed on the filing which AES made last week. KBRA rated the Class A tranche at BBB and the Class B tranche at B.

AES platform Aurora Master Funding is issuing the notes, with Morgan Stanley acting as structuring advisor, sole bookrunner and initial purchaser. AES DE is also partnered with a Morgan Stanley subsidiary, MS Solar Solutions Corp, for developing solar assets and with further divisions of Morgan Stanley for ownership and operation of assets.

AES is backing the deal through 15 of its distributed energy companies, classified as “project companies”. This consists of 12 commercial and industrial, municipal and small utility (CIMU) project companies, and a further 3 residential project companies.

The commercial and industrial segment breaks down to 1,548 assets across six US states and the US Virgin Islands, on 97 project sites, with assets earning revenues through PPAs, as well as through performance-based incentives (PBIs) and Solar Renewable Energy Certificates (SRECs), which are applicable in states with renewable portfolio standards (RPS) legislation. In the residential segment meanwhile, AES DE has 1,451 lease agreements with homeowners which pay out fixed fees.

In other words, while the company’s assets are weighted 93.7% to 6.3% in favour of residential systems versus commercial and industrial in terms of numbers, the total assets in terms of the value of aggregate discounted solar asset balance (“ADSAB”), made up of leases, revenues and PPAs, are instead weighted 70.5% to 29.5% in favour of CIMU assets. The total ADSAB is worth US$128 million, for the company’s total portfolio of 42.8MW.

KBRA described AES DE as an “experienced and capable asset manager” in both segments, for its track record of developing, financing, owning and operating projects in North America since 2009. Energy production has averaged at 102% above expectations for CIMU and residential project companies. Technical due diligence was carried out by engineering firm Black & Veatch.

“KBRA believes the portfolio’s strong performance is a reflection of the Company’s operational strategy and technical expertise,” the report said.

In addition, AES DE enters into contracts with customers rated “prime” for their credit rating scores, classed as above 700 on the US FICO index. The average FICO score is 768 for AES DE customers, and in particular gave CIMU contracted customers at the company an average weighted A+ rating in terms of the ADSAB.

However, the agency wrote that while the assets have performed above expectations, AES DE has grown significantly in a short space of time, leading to a risk of overstretching resources and expenses. KBRA also said that as solar is relatively new as an asset class, historical performance data is collated only over a short time and led to the agency modelling financial projections from its credit rating models in forecasting the possibility of residential default payments. It therefore also used credit analysis of counterparties in the CIMU to analysis the overall proposition of that segment.

28 July 2021
LONGi has launched its Hi-MO N module, the company's first bifacial module with N-type TOPCon cells, designed to deliver ultra- high value and lower LCOE to utility-scale PV power plants. This PV TechTalk Product Series webinar will provide an overview of the module’s technology and how the introduction of n-type technologies will provide efficiency and performance gains for solar project developers.
29 July 2021
This free webinar will explore the ongoing opportunities in the UK solar PV market, looking at global technology trends and how they apply to the UK. Join us for an overview of the project pipeline and forecast for deployment over the coming years. We'll be looking at the types of modules available and being used in the UK and presenting a case study on the deployment of bifacial modules in this market.
19 August 2021
The utility-scale PV market is poised for exponential growth and yet the industry still has many fundamental opportunities to improve on standards and best practice. Tracker shade loss has been one of those topics that deserve more attention, but has been typically handled by derate factors rather than trying to accurately forecast the loss over the life of the system. Join Nextracker’s subject matter experts, Aron Dobos and Neelesh Umachandran, and Rounak Kharait, director of solar energy assessments at DNV, for a webinar about why shade modeling matters and recommendations on what the solar industry should do about it.
25 August 2021
Energy Next is a new industry exhibition focusing on the latest renewable energy and energy efficiency technology, which will be held for the first time in 2021 in Sydney, Australia alongside the Clean Energy Council’s Australian Clean Energy Summit, the peak gathering of leaders driving Australia's energy transformation. Organised by the same people behind Australia’s largest clean energy event, All-Energy Australia, Energy Next will give visitors two days of access to key suppliers in the industry, free-to-attend professional development and industry workshops, and networking opportunities to better understand clean energy issues and solutions and learn about the latest developments in this transformational, dynamic sector.
25 August 2021
The Intersolar Summit Brasil Nordeste takes place in Fortaleza, Brazil. It addresses leading local and international experts on solar power and renewable energy in the region. The Summit’s mission is to provide in-depth education, enable high-quality networking opportunities, expand the use of PV technologies at regional and national level and strengthen the local PV industry. The Intersolar Summit Brasil Nordeste is organized by Intersolar South America - Latin America’s largest exhibition and conference for the solar industry: Solar Promotion International GmbH, Pforzheim, Freiburg Management and Marketing International GmbH (FMMI) and Aranda Eventos & Congressos Ltda, São Paulo as co-organizer.
25 August 2021
Join us to hear directly from the CTOs and heads-of-research from the top-20 cell/wafer producers to the PV industry today. The event will focus on predicting the key metrics underpinning the next big shift to n-type with answers to the key questions: When will the transition to n-type happen? Which companies will be first to 10 GW capacity and production? Who will be the key equipment suppliers for the new production lines? Which n-type process flow/architecture will emerge as the front-runner? What will polysilicon purity and wafer thickness levels look like for optimized n-type manufacturing? What will the upstream poly/wafer supply-chain look like in 5 years from now?

Read Next

July 26, 2021
The pace of climate action in the US is “wholly unacceptable”, according to the director of the US Department of Energy’s (DOE) Loan Programme Office
July 26, 2021
Support for distributed energy resources (DERs) like rooftop solar, community solar and battery storage could save Californian ratepayers US$120 billion over the next 30 years, according to a new report
July 26, 2021
Oil and gas giant Eni has acquired 1.2GW of Spanish renewables from Madrid-based European private equity manager Azora.
PV Tech Premium
July 26, 2021
Boris Farnung and Keith Punzalan of VDE and David Moser of EURAC’s Institute for Renewable Energy take a look at the positive impact comprehensive quality assurance measures can have on the early stage of a project’s lifespan, exploring yield assessments, LCOE projections and the critical need for high quality components.
July 26, 2021
US utility giant NextEra Energy added 1.84GW of renewables and energy storage projects to its backlog in Q2 2021, but its Energy Resources division reported a fiscal loss of US$315 million.
July 26, 2021
Meyer Burger is considering its legal options after long-time heterojunction tandem solar cell manufacturing partner Oxford PV ended its collaboration agreement unexpectedly.

Subscribe to Newsletter

Upcoming Events

Solar Media Events, Upcoming Webinars
July 29, 2021
Webinar
Upcoming Webinars
August 19, 2021
At 9am (PT) | 6pm (CEST)
Solar Media Events
August 25, 2021
Solar Media Events, Upcoming Webinars
October 6, 2021