SunPower Raises $400 Million In Debentures Offering

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Financial offerings by renewable energy companies are quite a hit globally these days. The latest example of the success that companies have been able to secure in raising funds is from the US-based solar panels manufacturer SunPower.

SunPower recently raised $400 million by offering debentures. The financial instruments were offered to qualified institutional investors through private placement. Buyers also exercised the right to purchase additional debentures worth $25 million; the transaction is subject to regulatory approval.

Total Energies Nouvelles Activites USA, a subsidiary of Total S.A., acquired debentures worth $100 million. Total owns around 57.5% of SunPower’s outstanding common stock. The proceeds from this fund raising exercise will be used to retire debt and fund potential acquisitions, and as working capital. The company may also move forward with its plans to pursue yieldco venture.

The debentures will pay interest semi-annually on January 15 and July 15 of each year, beginning on July 15, 2016, at an attractive rate of 4.00% per annum, and will mature on January 15, 2023.

SunPower’s success in raising capital mirrors the positive year for similar exercises by renewable energy companies as well as financial institutions looking to raise funds for low-carbon projects. The green bonds market has had a tremendous run this year. According to the Climate Bonds Initiative, over $40 billion has been raised in the labelled green bonds market.

One of the largest and most recent fund raising activity in the US was reported in November, when Southern Company, a subsidiary of Southern Power, raised a total of $1 billion in two tranches. The proceeds will be used for renewable energy generation projects, including financing of, or investments in, solar and wind power generation facilities located in the United States. 

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