Boston, MA 11/05/2013 (wallstreetpr) – On Monday, SolarCity Corp (NASDAQ:SCTY),a San Mateo based company has announced its plans to raise $54 million through private placement. The Company will make the borrowing by placing notes, which will mature during December 2026 and will be secured by its assets.
SolarCitystated that the notes will be collectively backed by power purchase agreements and photovoltaic systems as well as other similar leases and agreements which are primarily owned by its own subsidiarySolarCity LMC Series I, LLC.
Most recently, the company had raised almost $400 million capital for employing the proceeds towards its corporate purposes like capital expenditure, augmenting working capital and engaging into prospective acquisitions as well as strategic transactions. The company had raised the capital through selling of 3.91 million shares at the rate of $46.54 per share coupled with $230 million convertible notes which are scheduled to mature in 2018.While the solar energy market is concentrated to serve large-utility projects, SolarCity’s competitive advantage lie in its ability to offer tax credits and lucrative subsidies to the small businesses and homeowners, which has positioned it as the second player in the solar energy market.
There are two positives that could be seen from the company’s decision of private placement. Firstly, the placement will give the company margin to use the cash over the years, that it will receive from its leasing and power purchase deals entered in with the residential and commercial customers. Secondly, since the placement is secured by the assets of its subsidiary, SolarCity LMC Series I, LLC, therefore its own assets are not linked with the placement directly.
On Monday, the company’s decision of borrowing $54 million has been welcomed by the share markets equally. The company’s shares, having a market cap of $4.98 billion, surged by $6.22, recording a 11.36% gain to close at $60.97.
