Spruce Power Holding Corporation, a leading owner and operator of distributed solar energy assets across the United States, announced that certain of its subsidiaries have closed on a $130 million non-recourse debt facility (New Debt Facility) provided by Barings LLC. The New Debt Facility refinances the Company’s term loan of $125 million (the “SP4 Facility”) and provides for a net injection of incremental capital.

“Spruce is proud to announce the execution and closing of the refinance of its SP4 Facility. This transaction achieves a favorable balance of capitalizing on the Company’s strong asset performance and retention of asset level cash flows for our shareholders,” said Joe Pettit, Spruce’s VP of Corporate Development. “Additionally, I’m pleased to announce a new relationship with Barings, who brings deep industry expertise that is supportive of Spruce’s mission to power our customers’ clean and efficient energy use.”

“We are pleased to start a great partnership with Spruce to support the Company’s innovative business model and growth trajectory, as we seek to deliver attractive risk-adjusted returns to our clients,” said Burak Cetin, Barings’ Managing Director and Head of Private Residential and Consumer Asset Finance.

The $130 million New Debt Facility was rated A+ by Kroll and priced at a fixed loan rate of 6.889%. The initial balance of the New Debt Facility represents a 69% advance rate of ADSAB (contracted cash flows available for debt service discounted at 6%).

The New Debt Facility’s collateral pool consists of cash flows from over 22,000 solar contracts (the “Spruce Power 4 Portfolio”), the majority of which are variable rate PPAs indexed to retail electric rates of California investor-owned utilities. Since its acquisition in March 2023, rapidly rising retail electric pricing in California and other geographies across the Spruce Power 4 Portfolio has resulted in ADSAB accretion, and looking ahead, the Company expects continued strong performance of variable rate PPAs underlying the Spruce Power 4 Portfolio.

The refinancing transaction provides for an injection of incremental capital into the Company of over $6 million, net of fees and inclusive of positive value realized in the simultaneous termination of interest rate swaps underlying the SP4 Facility.

Santander US Capital Markets LLC served as the sole structuring agent.