| Item 1.01. | Entry into a Material Definitive Agreement. |
On June 28, 2024, a wholly owned subsidiary (the “AP8 Borrower”) of Sunnova Energy International Inc., a Delaware corporation (the “Company”), entered into that certain Amendment No. 6 to Credit Agreement (the “Amendment No. 6”), which, among other things, further amends that certain Credit Agreement, dated as of September 30, 2020 (as previously amended, the “AP8 Credit Agreement”), by and among the AP8 Borrower, certain other subsidiaries of the Company party thereto, Banco Popular de Puerto Rico, as agent, the lenders from time to time party thereto, the funding agents from time to time party thereto, and U.S. Bank National Association, as custodian.
The Amendment No. 6 amended the AP8 Credit Agreement to, among other things, extend the maturity date from September 25, 2024 to October 1, 2025. As a result of this amendment, (a) no further borrowings are permitted under the AP8 Credit Agreement and (b) no distributions of cash are permitted without the consent of the agent thereunder.
The foregoing description of the Amendment No. 6 is qualified in its entirety by reference to the full text of the Amendment No. 6, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated into this Item 1.01 by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
On June 28, 2024, a wholly owned, indirect subsidiary (the “Issuer”) of the Company, issued $151,900,000 aggregate principal amount of 6.15% Loan Backed Notes, Series 2024-B Class A (the “Class A Notes”), $54,400,000 aggregate principal amount of 7.00% Loan Backed Notes, Series 2024-B Class B (the “Class B Notes”) and $24,600,000 aggregate principal amount of 8.00% Loan Backed Notes, Series 2024-B Class C (the “Class C Notes” and, collectively with the Class A Notes and Class B Notes, the “Notes”). The Notes have an anticipated repayment date of June 20, 2034.
The Notes were offered within the United States only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), to institutional accredited investors under Section 4(a)(2) of the Securities Act, and to persons outside of the United States in compliance with Regulation S under the Securities Act. The Notes have not been registered under the Securities Act or the securities laws of any other jurisdiction. The Class A Notes, the Class B Notes and the Class C Notes have been rated AA-sf, A-sf and BBBsf, respectively, by Fitch Ratings, Inc.
The Collateral
The Notes are secured by the trust estate which consists primarily of all right, title and interest of the Issuer in a portfolio of loans made to consumers for the purpose of installing residential photovoltaic systems and/or energy storage systems. Sunnova ABS Management, LLC, a Delaware limited liability company and a wholly owned, direct subsidiary of the Company (the “Manager”), will act as manager and servicer pursuant to the terms of a Management Agreement and Servicing Agreement between the Issuer and the Manager. The Manager will provide, or cause to be provided, all operations, maintenance, administrative, collection and other management and servicing services, as applicable, for the Issuer and in respect of the loans.
Events of Default and Amortization Events
The indenture related to the Notes contains events of default that are customary in nature for securitizations of this type, including, among other things, (a) the non-payment of interest, (b) material violations of covenants, (c) material breaches of representations and warranties and (d) certain bankruptcy events. An event of default will also occur with respect to the Notes if they are not paid in full at their rated final maturity. The Notes are also subject to amortization events that are customary in nature for securitizations of this type, including (a) the occurrence of an event of default, (b) the bankruptcy or insolvency of the Manager, (c) failure to deposit the amount required to be deposited in the collections account, (d) the amount of funds available for distribution falling below certain levels and (e) the cumulative default level rising above certain levels.
