Tesla Is Planning $340 Million Securitization With Solar Contracts

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. solar 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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