AES Distributed Energy, a part of AES Corp (NYSE:AES) recently filed the first utility-sponsored solar ABS with Securities and Exchange Commission (SEC). After seeking approval from the SEC, when the ABS will first make its mark in the markets, it shall be completely one-of-its-kind sort of deal by any utility company that is backed by the solar assets.
The Details
ABS is issued via Aurora Master Funding and is sponsored completely by AES Corp. The issuers are now supposed to file Form ABS-15G with SEC. This should be done at least 5 days (business days) before the transaction is brought to the real markets. The ABS is underwritten by Morgan Stanley (NYSE:MS), the sponsor of AES Distributed Energy.
About the portfolio
This is the collateral portfolio which includes power purchase agreements along with equipment leases pertaining to 43 MW of solar assets. All these assets shall be in the total ownership of 15 diverse project companies. Out of these 43 Megawatt of solar assets; most belong to commercial and municipal sectors, with a few of the exceptions that remain confined to residential areas.
This deal will widen the portfolio of AES Corporation with solar ABS asset. As of now, these assets had remained a forte of inconsistent structures, which in turn, had made it difficult to invest in them.
Scope of solar power in the U.S.
America is picking up rapidly on solar power, which is evident from the fact that the households having solar rooftop increased by 70% on YoY basis in Q2 2014. It is for this reason that a lot of developers are now eyeing securitization as a kind of funding strategy.
Solar ABS, till date, has sealed five public deals worth $560.5 million. Out of these four deals are sourced from SolarCity Corp (NASDAQ:SCTY), key player in the U.S. market. Sunrun Inc (NASDAQ:RUN), in the meanwhile, had its first deal in July 2015.
