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SolarCity Seeks $201 Million in Debt as Musk Boosts Stake

SolarCity Corp., the owner of rooftop solar plants that’s more than quadrupled in value since its December initial public offering, is seeking to raise $201 million from investors as executives boost their stakes.

The company plans to offer $175 million of convertible senior notes due in 2018, according to a statement today. If underwriters led by Goldman Sachs Group Inc. exercise an over-allotment option, the offering may exceed $201 million.

SolarCity, based in San Mateo, California, is also loaning Goldman Sachs 2.8 million newly issued shares that some buyers of the notes may use to hedge their purchases. The solar company’s Chairman Elon Musk and Chief Executive Officer Lyndon Rive intend to purchase as many as 560,000 shares, a vote of confidence, according to Pavel Molchanov, analyst at Raymond James & Associates Inc.

“That’s always a good thing to see,” Molchanov said in an interview today. “Investors love it.”

SolarCity is well-known in large part because of billionaire Musk, who is also chairman and CEO of Tesla Motors Inc. He increased his stake in the electric car company last month through a similar transaction, Molchanov said.

“He’s putting his money where his mouth is,” he said.

The company said it expects to install about 270 megawatts of solar systems this year, up from a May forecast of 250 megawatts.

Musk is SolarCity’s biggest shareholder, with about a 28 percent stake, according to data compiled by Bloomberg. Rive owns 3.63 percent stake as does his brother, SolarCity Chief Technology Officer Peter Rive.

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