Quarterly report pursuant to Section 13 or 15(d)

Indebtedness

v3.4.0.3
Indebtedness
3 Months Ended
Mar. 31, 2016
Debt Disclosure [Abstract]  
Indebtedness

Note 6. Indebtedness

As of March 31, 2016, debt consisted of the following (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unused

 

 

Annual

 

 

 

 

 

 

 

 

Carrying Values, net of

 

 

Borrowing

 

 

Contractual

 

Interest

 

 

Maturity

 

 

debt discount

 

 

Capacity

 

 

Interest Rate

 

Rate

 

 

Date

 

 

Current

 

 

Long Term

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Recourse debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank line of credit

 

$

 

 

$

191,000

 

 

$

191,000

 

 

$

11,501

 

 

Varies (1)

 

3.45% - 5.75%

 

 

April 2018

Total recourse debt

 

$

 

 

$

191,000

 

 

$

191,000

 

 

$

11,501

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-recourse debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Line of credit

 

 

 

 

 

77,100

 

 

 

77,100

 

 

 

8,800

 

 

Varies (2)

 

2.93% - 3.16%

 

 

December 2020

Term Loans due in

   December 2020

   and 2021

 

 

117

 

 

 

33,032

 

 

 

33,149

 

 

 

1,400

 

 

LIBOR + 5.00%

 

 

6.00

%

 

December 2020

and 2021

Term Loan A due in

   December 2021

 

 

727

 

 

 

145,811

 

 

 

146,538

 

 

 

6,400

 

 

LIBOR + 2.75%

 

3.04% - 3.37%

 

 

December 2021

Bank term loan due in

   September 2022

 

 

306

 

 

 

16,219

 

 

 

16,525

 

 

 

4,000

 

 

LIBOR +2.25%

 

 

2.69

%

 

September 2022

Bank term loan due in

   April 2022

 

 

1,206

 

 

 

29,043

 

 

 

30,249

 

 

 

 

 

6.25% (3)

 

 

6.25

%

 

April 2022

Note payable

 

 

 

 

 

33,748

 

 

 

33,748

 

 

 

 

 

12.00%

 

 

12.00

%

 

December 2018

Solar asset-backed

   notes

 

 

3,235

 

 

 

101,243

 

 

 

104,478

 

 

 

 

 

4.40% - Class A

 

 

4.40

%

 

July 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5.38% - Class B

 

 

5.38

%

 

July 2024

Total non-recourse

   debt

 

 

5,591

 

 

 

436,196

 

 

 

441,787

 

 

 

20,600

 

 

 

 

 

 

 

 

 

Total debt

 

$

5,591

 

 

$

627,196

 

 

$

632,787

 

 

$

32,101

 

 

 

 

 

 

 

 

 

 

As of December 31, 2015, debt consisted of the following (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unused

 

 

Annual

 

 

 

 

 

 

 

 

Carrying Values, net of

 

 

Borrowing

 

 

Contractual

 

Interest

 

 

Maturity

 

 

debt discount

 

 

Capacity

 

 

Interest Rate

 

Rate

 

 

Date

 

 

Current

 

 

Long Term

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Recourse debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank line of credit

 

$

 

 

$

197,000

 

 

$

197,000

 

 

$

6,571

 

 

Varies (1)

 

 

3.67

%

 

April 2018

Total recourse debt

 

$

 

 

$

197,000

 

 

$

197,000

 

 

$

6,571

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-recourse debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Term Loan A due in

   December 2021

 

 

589

 

 

 

146,625

 

 

 

147,214

 

 

 

5,600

 

 

LIBOR + 2.75%

 

 

3.07

%

 

December 2021

Term Loan B due in

   December 2021

 

 

116

 

 

 

22,014

 

 

 

22,130

 

 

 

 

 

LIBOR + 5.00%

 

 

6.00

%

 

December 2021

Bank term loan due in

   April 2022

 

 

1,159

 

 

 

29,580

 

 

 

30,739

 

 

 

 

 

6.25%

 

 

6.25

%

 

April 2022

Note payable

 

 

 

 

 

32,781

 

 

 

32,781

 

 

 

 

 

12.00%

 

 

12.00

%

 

December 2018

Solar asset-backed

   notes

 

 

2,858

 

 

 

102,042

 

 

 

104,900

 

 

 

 

 

4.40% - Class A

 

 

4.40

%

 

July 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5.38% - Class B

 

 

5.38

%

 

July 2024

Total non-recourse

   debt

 

 

4,722

 

 

 

333,042

 

 

 

337,764

 

 

 

5,600

 

 

 

 

 

 

 

 

 

Total debt

 

$

4,722

 

 

$

530,042

 

 

$

534,764

 

 

$

12,171

 

 

 

 

 

 

 

 

 

 

(1)

Loans under the facility bear interest at LIBOR + 3.25% or the Base Rate + 2.25%. The Base Rate is the highest of the Federal Funds Rate + 0.50%, the Prime Rate, or LIBOR + 1.00%.

(2)

Loans under the facility bear interest at LIBOR + 2.50% for the initial three-year revolving availability period, stepping up to LIBOR + 2.75% in the following two-year period, or the Base Rate + 1.50% for the initial three-year revolving availability period, stepping up to 1.75% in the following two-year period. The Base Rate is the highest of the Federal Funds Rate + 0.50%, the Prime Rate, or LIBOR + 1.00%.

(3)

Effective April 1, 2016, the annual contractual interest rate was amended to 4.50%.

 

Bank Line of Credit

In April 2015, the Company entered into a syndicated working capital facility with banks for a total commitment of up to $205.0 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.

Under the terms of the working capital facility, the Company is required to meet various restrictive covenants, including meeting certain reporting requirements, such as the completion and presentation of audited consolidated financial statements. The Company is also required to maintain minimum unencumbered liquidity of at least $25.0 million in the aggregate as of the last day of each calendar month. The Company is further required to maintain 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 March 31, 2016.

Non-Recourse Line of Credit

In January 2016, subsidiaries of the Company entered into secured credit facility agreements with a syndicate of banks for up to $250.0 million in committed facilities. The facilities include a $220.0 million aggregate facility (“Aggregate Facility”) and a $7.0 million letter of credit facility. The principal and accrued interest on any outstanding loans mature on December 31, 2020.

The facilities are non-recourse to the Company and are secured by net cash flows of certain subsidiaries from power purchase agreements and leases, less certain operating, maintenance and other expenses which are available to the borrowers after distributions to tax equity investors. The facilities contain customary covenants including the requirement to maintain certain financial measurements and provide lender reporting.  The 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. The Company was in compliance with all debt covenants as of March 31, 2016.

Syndicated Credit Facilities

In January 2016, subsidiaries of the Company entered into secured credit facilities agreements with a syndicate of banks for up to $250.0 million in committed facilities. In addition to the non-recourse line of credit previously described, the facilities include a $23.0 million term loan (“Term Loan”). The Term Loan bears an interest rate of LIBOR + 5.0%, with a LIBOR floor of 1.0%, in the first three years, stepping up to LIBOR plus 6.5% in the following two-year period. The principal and accrued interest on any outstanding loans mature on December 31, 2020.

In December 2014, subsidiaries of the Company entered into secured credit facilities agreements with a syndicate of banks for up to $195.4 million in committed facilities. These facilities include a $158.5 million senior term loan (“Term Loan A”) and a $24.0 million subordinated term loan (“Term Loan B”). In addition, the credit facilities also include a $5.0 million working capital revolver commitment and a $7.9 million senior secured revolving letter of credit facility which draws are solely for the purpose of satisfying the required debt service reserve amount if necessary. Term Loan A, the working capital revolver and the letter of credit bear interest at a rate of LIBOR + 2.75% with a 25 basis point step up triggered on the fourth anniversary. Term Loan B bears interest at a rate of LIBOR + 5.00% with a LIBOR floor of not less than 1.00%. Prepayments are permitted under Term Loan A at par without premium or penalty, and under Term Loan B prepayment penalties range from 0%-2%, depending on the timing of the prepayment.

One of the Company’s subsidiaries is the borrower under the Term Loan A agreement and another of the Company’s subsidiaries is the borrower under the Term Loan B agreement. All obligations under Term Loan A, working capital revolver and letter of credit are collateralized by the subsidiary borrower’s membership interests and assets in the Company’s investment Funds. All obligations under the Term Loan B are collateralized by the membership interest in the subsidiary borrower. The credit facilities also contain certain provisions in the event of default, which entitle lenders to take actions, including acceleration of amounts due under the credit facilities and acquisition of membership interests and assets that are pledged to the lenders under the terms of the credit facilities.

The Company is required to maintain certain financial measurements and reporting covenants under the terms of the credit facilities. At March 31, 2016, the Company was in compliance with the credit facility covenants.

Bank Term Loan

In March 2016, a subsidiary of the Company entered into a $24.5 million secured, non-recourse loan agreement with a bank. The loan will be repaid through cashflows from a lease pass-through arrangement previously entered into by the Company. The loan matures in September 2022 and has an interest rate of LIBOR + 2.25%. 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.

In December 2013, a subsidiary of the Company entered into an agreement with a bank for a term loan of $38.0 million. The proceeds of this term loan were distributed to the members of this subsidiary, including the Company. The loan is secured by the assets and related cash flow of this subsidiary and is nonrecourse to the Company’s other assets. The Company was in compliance with all debt covenants as of March 31, 2016.

 

Notes Payable

In December 2013, a subsidiary of the Company entered into a note purchase agreement with an investor for the issuance of senior notes in exchange for proceeds of $27.2 million. The loan proceeds were distributed to the Company for general corporate purposes. On the last business day of each quarter, commencing with March 31, 2014, to the extent the Company’s subsidiary has insufficient funds to pay the full amount of the stated interest of the outstanding loan balance, a PIK interest rate of 12% is accrued and added to the outstanding balance. As of March 31, 2016 and December 31, 2015, the portion of the outstanding loan balance that related to PIK interest was $7.2 million and $6.3 million, respectively. The senior notes are secured by the assets and related cash flows of certain of the Company’s subsidiaries and are nonrecourse to the Company’s other assets. The entire outstanding principal balance is payable in full on the maturity date. The Company was in compliance with all debt covenants as of March 31, 2016.

Solar Asset-Backed Notes

In July 2015, the Company entered into a securitization transaction pursuant to which the Company pooled and transferred qualifying solar energy systems and related lease agreements secured by associated customer contracts (“Solar Assets”) into a special purpose entity (“Issuer”), and issued $100.0 million in aggregate principal of Solar Asset-Backed Notes, Series 2015-1, Class A, and $11.0 million in aggregate principal of Solar Asset-Backed Notes, Class B, backed by these Solar Assets to certain investors (“Notes”). The Issuer is wholly owned by the Company and is consolidated in the Company’s financial statements. Accordingly, the Company did not recognize a gain or loss on the transfer of these assets. As of March 31, 2016 and December 31, 2015, these Solar Assets had a carrying value of $188.0 million and $190.2 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 retained $7.3 million net of fees from proceeds from the Notes. In connection with the transaction, the Company modified two lease pass-through arrangements with an investor. The lease pass-through arrangements had been accounted for as a borrowing and any amounts outstanding from the arrangements were reported as lease pass-through financing obligation as further explained in Note 8, Lease Pass-Through Financing Obligations. The balance that was then outstanding under these arrangements was $119.7 million. The Company partially repaid this obligation by paying the investor an aggregate amount of $88.9 million. The Company accounted for the modification of the lease pass-through obligation as a modification of debt and did not record any gain or loss on the transaction.

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 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 March 31, 2016.