The board of US Solar Fund has announced a placing programme to raise over $100m that will go towards the refinancing of 177MW (DC) of PV assets and increasing a stake in a 200MW (DC) solar farm.
The initial proceeds raised will amount to $82.5m for the refinancing of the 177MW (DC) Heelstone portfolio, reducing the cost and level of gearing and $22m for the acquisition of a further 25% interest in Mount Signal 2.
Mount Signal 2 is a 200MW (DC) operating solar plant located in the Imperial Valley of Southern California, bringing the fund’s total ownership of the asset to 50%.
The placing programme includes an initial placing, offer for subscription and intermediaries offer of new ordinary shares (initial issue).
The issue price per new ordinary share will be $1, which represents a discount of 4.3% to the closing mid market share price of $1.045 as of 12 April 2021 and a premium of 3.1% to the 31 December 2020 net asset value of $0.97.
The fund also confirmed its 2021 annual cash-covered dividend target of 5.5 cents per ordinary share, within the timing set out at IPO.
The company has closed six transactions since its IPO, comprising a diverse portfolio of 42 assets with a total capacity of 493MW (DC).
These solar projects are spread across four states in the US.
All 42 assets have power purchase agreements for 100% of generation with nine investment-grade off takers, and a weighted average PPA term remaining of 15.4 years, generating reliable long-term cashflows.
Gill Nott, chair of US Solar Fund, said: “US Solar Fund has now delivered on our IPO objectives.
“As we step up to our target 5.5% dividend we are today asking investors for funds to reduce borrowing costs by refinancing existing debt, and build on our existing stake in California’s Mount Signal 2 solar plant.
“With a President deeply committed to fiscal policy backing climate change pledges, the United States is now on a clear path to a fully carbon-free transition within 14 years.
“Delivering on bold and welcome plans in this short time means an urgent need to develop further utility scale solar.”