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DSD Closes $155 Million Financing for First-of-its-Kind ABS with Community Solar
SCHENECTADY, N.Y. (December 15, 2022) – DSD Renewables (DSD) has raised $155 million in debt financing for the first commercial and industrial (C&I) solar asset-backed securitization (ABS) with a significant concentration of community solar assets. The transaction, which is DSD’s first issuance of asset-backed securities, was structured and underwritten by Credit Suisse Securities (USA) LLC.
Solar asset-backed securities represent a growing opportunity to package assets originated by solar developers into diverse portfolios and offer opportunities for investors to deploy capital into renewable energy at scale. DSD’s ABS portfolio consists of about 56% onsite solar and 44% community solar, including C&I and distributed generation projects across 11 states, with offtakers benefiting from decreased electricity costs and state solar incentive programs.
“This transaction is an important step in DSD’s mission to accelerate the deployment of renewable energy,” says Jamie Hutson, DSD’s Chief Investment Officer. “We have established a path to market for a substantial inclusion of community solar, which will enable access to clean, affordable energy for a larger pool of customers.”
Being DSD’s first ABS, its structured finance, community solar and legal teams partnered with outside counsel and third party consultants to educate the investor community on C&I solar, particularly community solar. As one of the first solar securitizations to include a significant portion of community solar, DSD worked closely with agencies and investors to better understand community solar revenue structures and to adequately assess risk through a data-driven approach. This process will streamline DSD’s next issuances, and serve as an emulative industry model for other issuers to bring community solar assets to the debt capital market.
“As a first-time issuer within a newer asset class, it was critical that we considered all relevant risk and strategized with agencies, consultants and our bankers to ensure an optimal outcome,” says Ian Manchester, DSD’s Vice President of Structured Finance. “With our first securitization under our belt, we look forward to future issuances which will continue to drive commercial solar adoption and widen access to community solar projects.”
Net proceeds from the transaction will be used to pay down existing debt on DSD’s assets and support its business growth on the project origination and acquisitions front. Credit Suisse acted as Sole Structuring Agent and Sole Bookrunner for this transaction. Sidley Austin LLP acted as counsel to DSD, and Mayer Brown acted as counsel for Credit Suisse.
To date, DSD has raised over $1.5 billion in funding to support its growth and accelerate solar project deployment. DSD intends to issue asset-backed securities every six to twelve months.
About DSD Renewables
DSD Renewables (DSD) is transforming the way organizations harness clean energy while building a more sustainable future. With unparalleled capabilities including development, structured financing, project acquisition and long-term asset ownership, DSD accelerates the deployment of renewable energy resources and creates significant value for our commercial, industrial, and municipal customers and partners. Backed by world-leading financial partners like BlackRock Real Assets and rooted in our founding at GE, our team brings a distinct combination of ingenuity, rigor, and accountability to every project we manage, acquire, own, and maintain. To learn more, visit DSDRenewables.com and connect with us on LinkedIn, Twitter, and Facebook.
The securities were not registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The securities were offered and sold only (i) within the United States to persons who are qualified institutional buyers as defined in Rule 144A under the Securities Act, and (ii) to certain non‑U.S. persons in offshore transactions in reliance on Regulation S under the Securities Act. This press release shall not constitute an offer to sell any securities in any jurisdiction.
This press release contains forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements can be identified by the use of terminology or expressions such as “may,” “expect,” “intend,” “estimate,” “anticipate,” “plan,” “project,” “believe” or “continue” or the negatives thereof or variations thereon, although not all forward-looking statements contain such identifying words. Such forward-looking statements are not guarantees of future performance and are inherently subject to a variety of risks and uncertainties that could cause actual results to differ from those projected or expressed in any such forward-looking statement. Such risks and uncertainties include, but are not limited to, the rapidly evolving and competitive nature of the solar industry, demand for solar energy solutions, the impact of declines in the retail price of electricity derived from the utility grid or from alternative energy sources, the impact of increases in interest rates or tightening of supply of capital on the ability of end-users to finance the costs of a solar energy system, the impact of increased competition from existing and new competitors, developments in alternative technologies or improvements in distributed solar energy generation, changes in government subsidies and other economic incentives for solar electricity, and the impact of the ongoing Covid-19 pandemic.
Because of these uncertainties, prospective investors should not rely on these forward-looking statements when making an investment decision. Additionally, statements regarding past trends or activities should not be interpreted as assurances that those trends or activities will continue in the future. Any forward-looking statement speaks only as of the date of this press release. DSD expressly disclaims any obligation or undertaking to provide any updates or revisions to any forward-looking statement contained herein to reflect any change in DSD’s expectations with regard thereto or any new information, change in events, conditions or circumstances on which any such forward-looking statement is based, except as required by law.
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