Tesla Is Planning $340 Million Securitization With Solar Contracts

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Tesla's Sexy Solar, Massive Batteries and Fast Cars

Tesla Inc. is preparing to bundle about $340 million of solar power-purchase agreements and leases into a bond offering.

The package comprises $265 million of Class A notes and $75 million of Class B notes, according to a report Tuesday by Kroll Bond Rating Agency Inc. The notes would mature in 2047 and are expected to be repaid by April 2028. Kroll rates the Class A notes A-; it didn’t rate the Class B notes. Credit Suisse Group AG is leading the deal.

Leases account for 59 percent of the portfolio and power-purchase agreements make up the balance. The company’s Tesla Energy unit popularized the solar lease model while it was still a separate company, SolarCity. It’s still the biggest U.S. rooftop installer despite a slowdown since its 2016 acquisition by Tesla.

SolarCity has been a prolific issuer of solar asset-backed securities. The latest issue is structured similarly to a securitization it did two years ago, Cecil Smart, a New York-based senior director at Kroll, said in an interview Tuesday. It led a roughly $145 million securitization earlier this year.

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