Annual report pursuant to Section 13 and 15(d)

Indebtedness

v3.8.0.1
Indebtedness
12 Months Ended
Dec. 31, 2017
Debt Disclosure [Abstract]  
Indebtedness
Indebtedness
As of December 31, 2017, debt consisted of the following (in thousands, except percentages):
 
 
Carrying Values, net of
debt discount
 
Unused
Borrowing
Capacity
 
Interest
Rate (1)
 
Maturity
Date
 
 
Current
 
Long Term
 
Total
 
 
 
 
 
 
Recourse debt:
 
 
 
 
 
 
 
 
 
 
 
 
Bank line of credit
 
$

 
$
247,000

 
$
247,000

 
$
406

 
4.58% - 4.87%

 
April 2018 (2)
Total recourse debt
 
$

 
$
247,000

 
$
247,000

 
$
406

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-recourse debt:
 
 
 
 
 
 
 
 
 
 
 
 
Senior
 
3,561

 
804,894

 
808,455

 
12,758

 
3.63% - 4.69%

 
September 2020 - October 2024
Subordinated
 
4,301

 
107,187

 
111,488

 
27

 
6.36% - 7.13%

 
September 2020 - October 2024
Securitization Class A
 
3,534

 
82,203

 
85,737

 

 
4.40
%
 
July 2024
Securitization Class B
 
440

 
9,644

 
10,084

 

 
5.38
%
 
July 2024
SREC Loans
 
9,693

 
22,488

 
32,181

 

 
7.28
%
 
July 2021
Total non-recourse debt
 
21,529

 
1,026,416

 
1,047,945

 
12,785

 
 
 
 
Total debt
 
$
21,529

 
$
1,273,416

 
$
1,294,945

 
$
13,191

 
 
 
 
As of December 31, 2016, debt consisted of the following (in thousands, except percentages):
 
 
Carrying Values, net of
debt discount
 
Unused
Borrowing
Capacity
 
Interest
Rate
(1)
 
Maturity
Date
 
 
Current
 
Long Term
 
Total
 
 
 
 
 
 
Recourse debt:
 
 
 
 
 
 
 
 
 
 
 
 
Bank line of credit
 
$

 
$
244,000

 
$
244,000

 
$
3,406

 
3.96% - 5.75%

 
April 2018
Total recourse debt
 
$

 
$
244,000

 
$
244,000

 
$
3,406

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-recourse debt:
 
 
 
 
 
 
 
 
 
 
 
 
Senior
 
3,020

 
439,400

 
442,420

 
14,300

 
2.86% - 4.50%

 
December 2020 - September 2022
Subordinated
 
116

 
42,869

 
42,985

 

 
6.00
%
 
December 2020 - December 2021
Note Payable
 

 
36,232

 
36,232

 

 
12.00
%
 
December 2018
Securitization Class A
 
3,315

 
87,483

 
90,798

 

 
4.40
%
 
July 2024
Securitization Class B
 
416

 
10,084

 
10,500

 

 
5.38
%
 
July 2024
SREC Loans
 
7,286

 
23,802

 
31,088

 
1,032

 
6.88
%
 
July 2021
Total non-recourse debt
 
14,153

 
639,870

 
654,023

 
15,332

 
 
 
 
Total debt
 
$
14,153

 
$
883,870

 
$
898,023

 
$
18,738

 
 
 
 
(1)
Reflects contractual, unhedged rates. See Note 13, Derivatives for hedge rates.
(1)
In February 2018, the maturity date of the Company's corporate bank line of credit was extended to April 2020 from its current maturity date of April 2018.
Bank Line of Credit
The Company has outstanding borrowings under a syndicated working capital facility with banks for a total commitment of up to $250.0 million. The working capital facility is secured by substantially all of the unencumbered assets of the Company, as well as ownership interests in certain subsidiaries of the Company. Loans under the facility bear interest at LIBOR +3.25% per annum or the Base Rate +2.25% per annum. The Base Rate is the highest of the Federal Funds Rate +0.50%, the Prime Rate, or LIBOR +1.00%.
Under the terms of the working capital facility, the Company is required to meet various restrictive covenants, such as the completion and presentation of audited consolidated financial statements, maintaining a minimum unencumbered liquidity of at least $25.0 million in the aggregate as of the last day of each calendar month and maintaining a modified interest coverage ratio of 2.00 or greater, measured quarterly as of the last day of each quarter. The Company was in compliance with all debt covenants as of December 31, 2017. As of December 31, 2017, the balance under this facility was $247.0 million with a maturity date in April 2018.
In February 2018, the Company and the lenders executed Amendment No. 5 (the "Amendment") to the Company's $250.0 million syndicated working capital facility dated as of April 1, 2015, as amended from time to time ("Credit Facility").  The Amendment extends the maturity date of the Credit Facility to April 1, 2020 from its current maturity date of April 1, 2018.  Other terms of the Credit Facility remain substantially the same, except the Amendment (i) increases the minimum interest coverage ratio from 2.0:1.0 to 3.0:1.0 and (ii) requires the Company to maintain an unencumbered cash balance of $30.0 million at the end of each calendar quarter starting on March 31, 2018. 
Syndicated Credit Facilities
Each of the Company's syndicated credit facilities contain customary covenants including the requirement to maintain certain financial measurements and provide lender reporting. Each of the syndicated credit facilities also contain certain provisions in the event of default which entitle lenders to take certain actions including acceleration of amounts due under the facilities and acquisition of membership interests and assets that are pledged to the lenders under the terms of the credit facilities. The facilities are non-recourse to the Company and are secured by net cash flows from Customer Agreements less certain operating, maintenance and other expenses which are available to the borrower after distributions to tax equity investors. The Company was in compliance with all debt covenants as of December 31, 2017.
As of December 31, 2017, certain subsidiaries of the Company have an outstanding balance of $280.8 million on secured credit facilities that were syndicated with various lenders due in October 2024. The credit facilities totaled $303.0 million and consisted of $293.0 million in term loans, and a $10.0 million revolving debt service reserve letter of credit facility. Term Loan A ("TLA") is a senior delayed draw term loan that bears interest at LIBOR +2.75% per annum for LIBOR loans or the Base Rate +1.75% per annum on Base Rate loans. Term Loan B ("TLB") is subordinated debt and consists of a Class A portion which accrues interest at a fixed interest rate of 7.03% per annum and a Class B portion which accrues interest at LIBOR +5.00% per annum or the Base Rate +4.00% per annum. The Base Rate is the highest of the Federal Funds Rate +0.50%, the Prime Rate, or LIBOR +1.00%. Under TLA, prepayments are permitted with no penalties.  Under TLB, prepayments are permitted with associated penalties ranging from 0% - 5% depending on the timing of prepayments.
As of December 31, 2017, certain subsidiaries of the Company have an outstanding balance of $157.0 million on senior secured credit facilities that were syndicated with various lenders due in April 2024. These facilities are subject to the National Grid cash equity transaction. The credit facilities totaled $202.0 million and consisted of a $195.0 million senior delayed draw term loan facility and a $7.0 million revolving debt service reserve letter of credit facility. Loans under the facility bear interest at LIBOR +2.75% per annum for the initial four-year period for LIBOR loans or the Base Rate +1.75% per annum for Base Rate Loans. The Base Rate is the highest of the Federal Funds Rate +0.50%, the Prime Rate, or LIBOR +1.00%. The facilities are non-recourse to the Company and are secured by net cash flows from Customer Agreements and SRECs, less certain operating, maintenance and other expenses which are available to the borrower after distributions to tax equity investors. Prepayments are permitted under the delayed draw term loan facility.
As of December 31, 2017, certain subsidiaries of the Company have an outstanding balance of $150.7 million on secured credit facilities agreements, as amended, with a syndicate of banks due in December 2020. The facilities totaled $340.0 million and consisted of a revolving aggregation facility (“Aggregation Facility”), a term loan ("Term Loan") and a revolving debt service reserve letter of credit facility. Senior loans under the Aggregation Facility bear interest at LIBOR +2.50% per annum for the initial three-year revolving availability period, stepping up to LIBOR +2.75% per annum in the following two-year period. The subordinated Term Loan bears interest at LIBOR +5.00% per annum for the first three-year period, stepping up to LIBOR +6.50% per annum thereafter. Term Loan prepayment penalties range from 0% - 1% depending on the timing of prepayments.
As of December 31, 2017, certain subsidiaries of the Company have an outstanding balance of $163.7 million on secured credit facilities agreements with a syndicate of banks due in December 2021. The facilities totaled $195.4 million and consisted of a senior term loan (“Term Loan A”), a working capital revolver commitment and a revolving debt service reserve letter of credit facility which draws are solely for the purpose of satisfying the required debt service reserve amount if necessary. Loans under Term Loan A bear interest at LIBOR +2.75% per annum, stepping up to LIBOR +3.00% per annum on the fourth anniversary. The facilities also include a subordinated term loan (“Term Loan B”) which bears interest at LIBOR +5.00% per annum. Prepayments are permitted under Term Loan A and Term Loan B at par without premium or penalty.
Senior Debt
As of December 31, 2017, a subsidiary of the Company has an outstanding balance of $111.4 million on a revolving loan facility due in September 2020. The facility is secured by the assets and related net cash flow of this subsidiary and is non-recourse to the Company's other assets. Loans under the facility bear interest at LIBOR +2.75% per annum for the senior secured loan, and LIBOR +5.50% per annum for the subordinated loan. The Company was in compliance with all debt covenants as of December 31, 2017.
As of December 31, 2017, a subsidiary of the Company has an outstanding balance of $24.5 million on a term loan due in April 2022. The loan is secured by the assets and related net cash flow of this subsidiary and is non-recourse to the Company’s other assets. The Company was in compliance with all debt covenants as of December 31, 2017.
As of December 31, 2017, a subsidiary of the Company has an outstanding balance of $12.3 million on a non-recourse loan due in September 2022. The loan is secured by substantially all of the assets of the subsidiary including this subsidiary’s membership interests and assets in its investment funds. The loan contains certain provisions in the event of default which entitles the lender to take certain actions including acceleration of amounts due under the loan. Loans under this facility bear interest at LIBOR +3.00% per annum. The Company was in compliance with all debt covenants as of December 31, 2017.
As of December 31, 2017, a subsidiary of the Company has an outstanding balance of $19.7 million on a secured, non-recourse loan agreement due in September 2022. The loan will be repaid through cash flows from a lease pass-through arrangement previously entered into by the Company. The loan agreement contains customary covenants including the requirement to maintain certain financial measurements and provide lender reporting. The loan also contains certain provisions in the event of default which entitles the lender to take certain actions including acceleration of amounts due under the loan. Loans under this facility bear interest at LIBOR +2.25% per annum. The Company was in compliance with all debt covenants as of December 31, 2017.
Securitization Loans
As of December 31, 2017, a subsidiary of the Company has an outstanding balance of $95.8 million on solar asset-backed notes ("Notes") secured by associated customer contracts (“Solar Assets”) held by a special purpose entity (“Issuer”). As of December 31, 2017 and December 31, 2016, these Solar Assets had a carrying value of $172.8 million and $181.8 million, respectively, and are included under solar energy systems, net, in the consolidated balance sheets. The Notes were issued at a discount of 0.08%. The Company was in compliance with all debt covenants as of December 31, 2017.
In connection with the transaction, the Company modified two lease pass-through arrangements with an investor. The modified lease-pass through arrangements require the majority of the cash flows generated by the Solar Assets to be passed on to the Issuer through monthly lease payments from the Fund investor. Those cash flows are used to service the monthly principal of the Notes and interest payments and satisfy the Issuer’s expenses, and any residual cash flows are retained by the Fund investor and recorded as a reduction in the remaining financing obligation. The Company recognizes revenue earned from the associated Customer Agreements in accordance with the Company’s revenue recognition policy. The assets and cash flows generated by the Solar Assets are not available to the other creditors of the Company, and the creditors of the Issuer, including the Note holders, have no recourse to the Company’s other assets. The Company was in compliance with all debt covenants as of December 31, 2017.
SREC Loans
As of December 31, 2017, a subsidiary of the Company has an outstanding balance of $32.2 million on a secured credit agreement with a weighted average interest rate of 7.28% and 6.88% as of December 31, 2017 and 2016, respectively. The facility is non-recourse to the Company and is secured by substantially all of the assets of such subsidiary, including its rights in and the net cash flows from the generation of contracted and uncontracted SRECs by certain subsidiaries of the Company. Loans under the facility bear interest at LIBOR +5.50% per annum for contracted SRECs and LIBOR +9.00% per annum for uncontracted SRECs. The facility contains customary covenants including the requirement to provide lender reporting. The Company guarantees the delivery of SRECs on the subsidiary’s underlying contracts in the event of a delivery shortfall pursuant to the SREC contracts with counterparties. The Company does not guarantee payments of principal or interest on the loan. The credit facility also contains certain provisions in the event of default which entitles the lender to take certain actions including acceleration of amounts due under the facilities. The Company was in compliance with all debt covenants as of December 31, 2017.
Notes Payable
In December 2017, the Company paid off the notes for $40.9 million which included payment for accrued interest, PIK, and a prepayment penalty. The Company recognized $0.6 million loss on the early debt extinguishment related to the prepayment premiums and write off of unamortized debt issuance costs.
The scheduled maturities of debt, excluding debt discount, as of December 31, 2017 are as follows (in thousands):
2018
$
24,476

2019
36,585

2020
394,850

2021
313,852

2022
59,379

Thereafter
486,586

Subtotal
1,315,728

Less: Debt discount
(20,783
)
Total
$
1,294,945